How To Integrate A Payment Gateway Into A Website
By: Łukasz Kubok
Tags: Payment Gateway, Fintech, Software Development

No matter what type of platform you own: eCommerce, eLearning or a booking one, your main concern will always be to ensure that your customers are safe and you provide them with an easy-to-use payment system.

The provider you choose has to satisfy the needs of your business as well as the requirements of your customers.

Over 21% of customers tend to abandon websites that have a long checkout process and 17% because the website was not secure.

Integrating a payment gateway into your store will give your website security and improve the overall user experience.

If you are looking for more information on payment gateways, keep on reading.

What is a payment gateway?

A payment gateway is a solution that connects your bank account with a merchandising platform to which you wish to transfer money. It creates a secure tunnel between online retailers and buyers.

Such a solution is a fundamental feature that is offered by every eCommerce solution. It allows us to make purchases anywhere in the world while ensuring maximum data security.

Payment gateways are virtual terminals equivalent to a physical point-of-sale terminals.

How does a payment gateway work?

A payment gateway is an important broker between customers and merchants. It is dealing with payment processing and authorizing. Payment gateways deliver an encryption method to sensitive data like credit card numbers. The data is encoded giving you a guarantee that it is sent securely between the online store and the customer.

Here is a basic flow of the transaction:

a customer finishes an order by clicking a submit button or its equivalent the customer is redirected to a payment gateway allowing him/her to choose a payment method via credit card or to be redirected to a bank website. The transaction is transferred to the issuing bank or another page like 3Dsecure to authenticate the transaction if the authentication is successful the bank checks if the customer has enough funds on his/her account to make a response to the payment gateway that the transaction is a success or not when the response from the bank is ready, it goes to the merchant. If the answer is negative, the merchant will display a notification about an error to the user. If it is positive, the merchant seeks the transaction from the bank in the end, the bank settles the payment with the payment gateway, which settles the money with the merchant

The key points that any payment gateway provided are authorization, settlement and reporting.

How does a payment gateway keep information secure?

Security is crucial in the eCommerce world. Customers want to keep their credit card information and payment information safe. Data security in online payments or eCommerce can be ensured by using technologies like:

TLS encryption : payment gateways use SSL certificates. An easy way to check if our payment gateway uses a secured protocol is to check its URL. If it is https we can assume that we are secure

: payment gateways use SSL certificates. An easy way to check if our payment gateway uses a secured protocol is to check its URL. If it is https we can assume that we are secure PCI-DSS Compliance : the Payment Card Industry Data Security Standard was established to provide secure payment solutions by forcing companies to use Firewalls on their internal networks and encrypt the cardholder data while denying to store this data on disks or paper

: the Payment Card Industry Data Security Standard was established to provide secure payment solutions by forcing companies to use Firewalls on their internal networks and encrypt the cardholder data while denying to store this data on disks or paper Tokenization : a way of substitution the real card numbers with randomly generated ones that are useless to hackers

: a way of substitution the real card numbers with randomly generated ones that are useless to hackers Two-factor authentication: an extra layer of security that is used to confirm the user’s identity by sending a message to a registered mobile number

Benefits of using a payment gateway

Payment gateways have lots of benefits, that is why they are so popular in the eCommerce world. Let’s present some of them:

Security: payment gateways secure transaction by protecting and encrypting sensitive data

payment gateways secure transaction by protecting and encrypting sensitive data Sales boost: they help you expand your business by reaching to customers from all over the world

they help you expand your business by reaching to customers from all over the world Time saving: transactions are much quicker than standard manual processing via bank

transactions are much quicker than standard manual processing via bank Everyday at any time: payment gateways work 24/7

payment gateways work 24/7 Security, once more: thanks to payment gateways you can avoid suspicious transactions by blocking transactions from certain countries or IP addresses

thanks to payment gateways you can avoid suspicious transactions by blocking transactions from certain countries or IP addresses Marketing: they have a positive impact on marketing since you can create affiliate program with rewards with referral commission from other sites

Payment gateway transaction types

Payment gateway providers support many types of transactions. The most common ones are:

payment/sale/debit: the most standard transaction. The payment gateway asks the bank about the authorization of transactions. If it is a successful settlement of the transaction will be accomplished by the end of a working day

the most standard transaction. The payment gateway asks the bank about the authorization of transactions. If it is a successful settlement of the transaction will be accomplished by the end of a working day authorization: a payment gateway blocks demanded amount of money on the buyer’s account for the future settlement transaction. The period during which the money is blocked depends on the card system and the issuing bank but it usually takes from 3 to 7 days

a payment gateway blocks demanded amount of money on the buyer’s account for the future settlement transaction. The period during which the money is blocked depends on the card system and the issuing bank but it usually takes from 3 to 7 days capture: this kind of transaction takes place when the merchant wants to charge the amount of money that was previously blocked by an authorization transaction. To capture a transaction means to send it for settlement

this kind of transaction takes place when the merchant wants to charge the amount of money that was previously blocked by an authorization transaction. To capture a transaction means to send it for settlement void: if the transaction is not settled it allows to immediately unlock the previously blocked transaction on the user’s account without the need to wait for the blocking time to expire

if the transaction is not settled it allows to immediately unlock the previously blocked transaction on the user’s account without the need to wait for the blocking time to expire refund: a kind of transaction that gives the merchant an opportunity to cancel the transaction when the buyer had been already charged. It sends the money back to the client’s bank account

a kind of transaction that gives the merchant an opportunity to cancel the transaction when the buyer had been already charged. It sends the money back to the client’s bank account chargeback: an operation when a customer appeals to the bank about the charges on their bill. A customer can appeal in cases when the item was not received, due to technical problems, unauthorized card usage or in the case of a friendly-fraud situation

an operation when a customer appeals to the bank about the charges on their bill. A customer can appeal in cases when the item was not received, due to technical problems, unauthorized card usage or in the case of a friendly-fraud situation credit: a transaction similar to a refund. It can only proceed in the case when the previous transaction successfully incomed to the buyer’s account. The merchant can credit user’s credit card exceeding the amount of money from the previous successful transaction

Payment gateway types

There are two types of payment gateways: hosted and non-hosted. In a hosted payment gateway after clicking the purchase button the customer is redirected to the payment service provider page.

In non-hosted payment gateways the user enters the debit or credit card details directly on the checkout page of the store owner.

Here are the most popular providers:

HOSTED PAYMENT GATEWAYS

NON HOSTED PAYMENT GATEWAYS

Costs of using payment gateways

The overall costs of using a payment gateway depends on your overall turnover. However, you should keep in mind that the transaction fee starts from about 2,9% up to 3,5% plus an additional $0,30 per each transaction.

Some of the payment gateways also have monthly fees as well as an installation fee, so take it into consideration when choosing a provider.

Follow the steps to integrate the chosen payment gateway into your website.

PayPal integration

create a PayPal button

set up the basic payment

extend the basic payment with additional parameters

execute the payment

Amazon Pay integration

create an Amazon Pay button

2. add Address Book and Wallet Widgets to your website

3. obtain buyer’s authorization for recurring payments

4. set a billing agreement details and confirm the agreement

5. validate the billing agreement

6. request authorization

Tada! Your payment gateway is ready!

Conclusions

There are many ready-made solutions for payment gateways on the market. Choosing the right provider is a key decision for growing your business. Implementing a payment gateway into your website will deliver enhanced user experience and maximum security for your customers. Many of payment gateways are equipped with security measures like TLS encryption, two-factor authentication and are PCI-DSS compliant.

Integrating a payment gateway is not complicated and will definitely have a positive impact on your store.

If you are looking to create a website integrated with a payment gateway or need to add a gateway to your existing product, contact our team of developers.