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A Simple Guide On How To Create A Payment Gateway On Your Website

Many businesses are paying attention to how to create their own payment gateway or integrate a payment gateway with their websites or online shops. 

However, many people do not understand thoroughly how to create a payment gateway. There are many misconceptions about the steps involved with creating and running a payment gateway. 

This article will cover several types of payment gateways, their features, and guidelines on how to create a payment gateway for a website. 

What is a payment gateway?

Before you add a payment gateway to your website, it is important to understand what it is in greater detail.

A payment gateway is an online representation of a real point-of-sale terminal in retail stores. It transfers the key information (the payment data from the customer to the acquirer, and the payment acceptance or decline back to the customer) between websites or mobile devices and payment processors or banks, and vice versa. Thus, the payment gateway establishes communication between three parties in the payment process. A payment gateway encrypts all sensitive information like credit card numbers, expiration dates and CVV code. This action is to ensure the transaction is safe and protect your website from fraud. 

So, if you decide to create a payment gateway for your website, you need to consider it as a tool to deal with all online transactions. 

How to create a payment gateway

1.  Choose a transaction type for your website

Before diving into the details of payment gateway integration, let’s look at existing types of payment transactions. You may want to choose a specific one for your e-commerce website or portal. There are five main types of transactions: authorization, capture, sale, refund, and void. 

  • Authorization

The purpose of this transaction is to determine customers’ ability to pay and confirm if there are enough funds on their credit cards. The actual fund transfer does not take place in this case. 

This transaction is normally used when customers order something from your website that will take a long time to deliver. In this case, you need to guarantee the funding by the card issuer. 

  • Capture

The capture transaction allows you to capture the money that was previously authorized and send it for settlement. For instance, if you sell a product online that takes time to manufacture or prepare before shipping, first, you need to authorize the payment. And when the product has been delivered, capture the amount, and it will be transferred to your bank account. 

  • Sale

A sale transaction combines authorization and capture. If you fulfill orders immediately, this is the transaction you should use. The money is charged and transferred immediately. The sale transaction will also be suitable if you sell a membership service and immediately provide the user with access. 

  • Refund

This transaction is used when an order has to be canceled for some reason. The merchant then needs to refund a transaction and submit it for processing. The refund is often limited to the original amount authorized and can only be applied to Sale and Capture transactions. 

  • Void 

The Void transaction is similar to the Refund, but it can only be applied if the transaction has not been settled yet. The transaction will likely disappear from the customer’s account statement within 24 hours. However, it may take up to 5 business days to process the refund. 

2. Select payment gateway types and providers

Now, let’s see what the payment gateway market has to offer. It always makes sense to check the available solutions before you decide to create a payment gateway for a website. There are two types of payment gateways to choose from: hosted and non-hosted.

Hosted payment gateways

These payment gateways take your customer away from your website to complete the payment and then redirect them back once the payment process is completed. 

They will take care of transaction security and are quite easy to integrate into your website. However, you cannot control what happens and your customer might get distracted and navigate away. The most well-known hosted payment gateways are PayPal, Stripe, Amazon Payments, and SagePay. Let’s take a closer look.

PayPal: This is probably the first option that comes to mind when thinking about adding a payment to a website or portal. PayPal is famous for its reliability, flexibility, and popularity – many people worldwide have a PayPal account. It monitors all activities around the clock and offers advanced encryption for fraud protection in terms of security. PayPal is easy to integrate into any website with a detailed integration manual. The best option is PayPal Express Checkout integration. If an order is canceled, Paypal Express automatically refunds the amount to the customer. Furthermore, PayPal Express Checkout modules are available for various e-commerce platforms such as Magento, Shopify, WooCommerce, and other shopping carts. 

  Stripe: Stripe is another hosted solution for online payment integration with PCI-compliant. It is easy to use, accepts major credit cards, and works with Apple Pay, Alipay, Android Pay, and WeChat Pay (beta). Stripe allows e-commerce merchants to receive payments on their sales websites. Popular platforms that use Stripe are Kickstarter, Twitter, Shopify, Pinterest. Stripe has a default currency so that when you receive payments in other currencies, it will automatically convert to the default currency. To integrate Stripe into your website, follow Stripe guidelines or search for a ready module if you use an e-commerce platform. Opening a Stripe account is as similar as opening a bank account. You can transfer money from your Stripe account to your bank account. You can also create multiple Stripe accounts for your products or sales page. Each account has its own payments, control panel and authorized user of your choice. 

See more: Stripe’s Recurring Payment System That Helps To Boost Your Online Business.

  Amazon Pay: Amazon Pay is not a 100% hosted payment gateway solution because it does not completely take users away from your website. It incorporates nicely into the interface of your website and lets your customers use the credit cards that are already stored in their Amazon account. Customers can choose between MasterCard, Visa, Discover, American Express, JCB, and Diner’s Club credit cards. However, the cards must have a US billing address. There are two common situations when you choose AmazonPay. If you run a store on an e-commerce platform, you can save a lot of time by checking the full list of Amazon Pay integration to the most common shopping cart for detailed instructions. Otherwise, if you own a customized shop without CMS, you should hire a developer to help you, or try on your own with a detailed integration guide that includes code samples and testing scenarios. 

Hosted payment gateways

Non-hosted payment gateways are those that just integrate into your website and keep the users at your store or platform, not taking them away and getting them distracted. To non-hosted payment gateways, security is a slight disadvantage. Since non-hosted payment gateways work on your server and store customers’ credit card information, you have to ensure fraud protection, secure cardholder information storage, and maintain PCI-compliance yourself. 

Most non-hosted payment gateways come with expensive APIs and ready, available modules to integrate into your website. However, if you use a customized engine on your website, you will need to shell out on custom programming to integrate the payment gateway to your website. 

Here is a list of the most common non-hosted payment gateways: 

Authorize.net: Authorize.net is one of the leading payment gateways since 1996. Authorize.net accepts major credit cards and works with digital solutions like PayPal, Visa Checkout, and Apple Pay. It collaborates with credit cards issued anywhere in the world, however, your business should be based in the US, the UK, Canada, Europe, or Australia. 

SagePay Direct Integration: SagePay Direct allows for seamless integration into your website. It gives you full control of the checkout experience and doesn’t take your customer away from the site to complete payment. Everything happens on only one page, and all the details of transactions, payments, and customer information are stored on your server. Of course, you have to ensure security in this case. 

MangoPay: This gateway will be the best choice if you run a crowdfunding website or a marketplace. With MangoPay, users always stay on your platform, and you are free to customize the interface of your checkout page. It also manages PCI requirements, provides a 3D secure payment on-demand, and does not store anything on your server. However, if you plan to integrate MangoPay into your website, make sure to check if your business is eligible to work with it. MangoPay is very straightforward about high-risk companies and products that they do not deal with. 

3. Take payment gateway to the next level with cutting-edge payment software

If you are planning to create a payment gateway on your website and consider choosing Stripe, we suggest taking this experience to the next level with AccountDock. AccountDock is a leading Stripe-billing platform for all SME businesses. You can track your Stripe billing history, operate your payment dashboard, send professional and branded invoices to clients within minutes! By doing that, you can focus on your core functions and no longer have to worry about revenue handling. 

Final thoughts

Alongside the rapid development and high competition in the online business world, payment applications should be more flexible, easy, and professional. 

We hope this article gives you useful information to succeed in your business venture. If you have any other ideas about how to create a payment, let us know by sharing a comment!

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