Anand Kumar Mishra
10 Mins to Read
Table of content
There are various payment gateways available in the market now. What is the reason for the sudden rise in the number of payment gateways available or why are so many businesses interested in developing a personalized payment gateway for their app?
Too many people are unaware of the size and scope of creating a payment gateway from scratch. Presently, 79% of game apps and 50% of non-game apps use in-app purchases, and they do so to the tune of $380 billion in app expenditures globally.
- The size of the worldwide payment gateway market was estimated at USD 26.79 billion in 2022, and it is anticipated to grow at a CAGR of 22.2% from 2023 to 2030.
- With an increase of 13%-20%, the e-commerce industry has grown significantly during the pandemic as more customers purchase online.
- By accounting for over 57.0% of worldwide revenue, the hosted segment dominated the market in 2022
- In the segment of digital payments, the total transaction value is anticipated to hit $9.46 trillion in 2023.
Benefits of Developing your Custom Payment Gateway
Fewer Fees: You are obligated to pay excessive costs for using services when using ready-made options. In addition, you are responsible for paying the registration costs. Things are different when using a custom payment method. No matter how many deals you complete, you will be your own boss and not be charged any operating costs.
Custom Features: No matter which ready-made global payment provider you choose, none will satisfy your needs. Some payment methods might not work with multi-currency transactions. Others might not support recurring charges. Still, others might be too costly to use frequently, and so on. However, choosing custom payment methods will enable you to meet most of your company’s needs.
Additional Revenue: You become a provider by having a custom payment gateway. This entails that you can charge other businesses registration and transaction costs in exchange for their use of your services. You can also add more features like advertisements to generate a side revenue.
More Scope of Payment Gateway Integrations: Your payment gateway can be integrated with desktop, mobile, web, smart vending machines, wearable,etc., applications using a custom API. Connecting your gateway with various mediums will be unrestricted with a strong API. You will then have a single window through which to watch all of your payment operations.
Enhanced Security: Payment gateway data leaks are relatively rare, even though most businesses make significant security investments. However, if you want increased security to guard against payment fraud.
Must-have Features of a Custom Payment Gateway
Recurring Payments: With the help of this feature, businesses can automatically deduct money for continuing services from customers’ accounts. It is simple to set up through dashboards, virtual terminal commands, or APIs. This is the ideal option for subscription-based service providers who require payments on a regular basis based on the monthly or yearly plan. Once the customer enters their card information and indicates their consent to be charged, the recurring payments begin immediately.
Fraud Protection: Online transactions frequently run the danger of card-not-present fraud and other misuses. Therefore, you must follow the best data protection and security procedures to safeguard your users’ privacy and avoid becoming a victim of fraud.
Tokenization: To stop hackers from compromising data security entails replacing confidential data with random alphanumeric tokens. The sensitive information must remain in a centralized place for future use.
Easy Integrations: Thanks to this feature, you can easily integrate with various payment gateways. You will be able to provide your end users with multiple choices. In addition, you should choose a simple CRM system to integrate with popular business software tools.
Virtual Terminal: With the help of this feature, you or other business owners can take credit card payments online. This indicates that a customer can pay using a mobile device instead of an online credit card payment method.
Hosted Payment Gateways: A purchasing process run by a third party that directs customers to the payment service provider’s (PSP) website. After the purchase, a user will be redirected to the website’s checkout page. This ensures safety.
Disputes & Arbitration: Users must be able to manage bank disputes easily. This feature will increase confidence while giving you a competitive advantage over other businesses in your market.
Components of Developing a Payment Gateway
Payment gateway development has a few components, just like any other project. For developers to understand how to build a payment gateway, it’s crucial to consider them all. You need to understand the key components to build a payment gateway.
- Fraud Protection Systems. Security is the primary requirement for digital payments so customers can trust your payment gateway. The ability to foresee and stop a fraud assault is essential. Every payment method, therefore, requires unique systems to find hackers. The confidentiality of the client’s personal information is also crucial to maintain. Therefore, if you want to earn the confidence of your customers, fraud protection systems are necessary.
- Tokenization. Simply put, IBAN and other confidential data should be replaced with random alphanumeric tokens to make the gateway the only method of handling the transaction. The primary advantage of tokenization is security from hackers; it assures that all sensitive data will be safe and undamaged.
- Recurring Payments. This functionality can be configured with the help of dashboards, APIs, and virtual terminal instructions. This is your best option if you want to offer a subscription service. Additionally, it would help if you didn’t make recurring purchases active by default.
- Seamless Payment Gateway Integration. Because it is so user-friendly, it is practical to integrate your payment gateway into various payment gateways. You can create a settlement account and select the purchasing bank. You can also charge a processing fee. The integration of a payment gateway offers you a variety of choices.
- Scalability. A product’s development is a crucial element as well. Its progress is much more probable if it is scalable. Your product can always be improved and given new features. The more prospective customers you can draw in, the more advanced your payment gateway needs to be.
- Disputes and Arbitration. It is also a huge plus if your interface can handle bank issues. Generally, any project greatly benefits from the UI, and the payment gateway is no exception.
Pros And Cons of Custom Payment Gateway Development
- Lower fees: You are obligated to pay huge fees for each transaction if you use ready-made online payment methods. Additionally, you usually have to pay a registration charge. Thanks to the customized solution, you can work on your own schedule and save money on payment handling.
- Custom features: Even the best international payment gateway cannot satisfy all of your needs. If you read through the list of payment options, you’ll notice that some don’t support transactions involving multiple currencies, others don’t support recurring charges, and others are too costly. By choosing custom development, you can obtain the desired precise result.
- Additional revenue: By owning a payment gateway, you can start offering your services. It implies you can demand transaction and registration costs from other business owners. Therefore, you can develop a new way to increase your profit.
- Development time: When creating a custom gateway, you will invest time in the planning stage, pure development, testing, and maintenance. Compared to integrating a pre-made solution, it will require more time. In the long term, though, you will profit because you will stop paying recurring fees and get a second source of income.
- Certification costs: You must connect to the payment gateway and adhere to PCI requirements to operate your gateway. To be explicit, it is a slow and long route. Additionally, it comes at a high expense. By selecting a white-labeled option, you can connect to the gateway after everything has calmed down and you escape this headache.
- Sole responsibility: You are entirely responsible for the security of transactions as a payment service provider. You must ensure that cardholder data is protected and there is a low chance of fraud.
Cost of Developing a Custom Payment Gateway System
The cost of a custom payment gateway depends on various variables, including your preferences and business strategy. It is not possible to identify an exact price.
Many factors must be considered before an effective, high-performing payment gateway is launched. Fortunately, we can experiment in software development, alter what doesn’t work, and enhance what does. Your payment gateway should succeed if it closely complies with security, functionality, and usability criteria and offers a wonderful user experience.
Building your own payment gateways can be worthwhile, boost the value and profitability of your company, and be worth the time and effort. Hire Apponward Android App Developers & iOS App Developers with domain expertise if you’re prepared to create or update your payment system to move closer to finding a solution. With years of expertise in the fintech sector, Apponward has aided countless clients in building their personalized payment gateway.
We have developed innovative solutions or expanded internal technical teams to provide assistance and project-specific expertise that resulted in features that generate revenue,
We are experts in building transaction simulators to speed up roll-out, enabling and maintaining the security of prepaid cards, and developing repeatable and strategic methods for handling payment recovery.