Can you imagine your life without a credit card? Contactless payment allows us to spend money so effortlessly that we are used to this process. That is why if you’re planning to build a mobile app or website involving money operations, you need to know everything about payment gateway integration.
Let’s consider what payment gateways mean and how to integrate them into your software.
What is a Payment Gateway?
Before deep diving into payment gateway peculiarities, let’s consider payment gateway definition, and how it works in general.
The payment gateway services allow customers to purchase something through mobile apps or websites. In fact, it’s a facilitator between the transaction customers want to make and the payment processor. Why is there a need for a facilitator? The app and payment processors can’t interact with each other directly due to security reasons.
So, payment gateway solutions are a part of an app that utilizes encryption to provide secure processing of sensitive information (for instance, PIN code) and make it possible for users to purchase a product or services via mobile applications. It’s an excellent tool for businesses that don’t want to be in charge of ensuring the security of private data and want to add payment features to their applications.
How Does a Payment Gateway Work?
Above all, customers need to have access to the internet to use digital payment capabilities. To male a transaction, customers need to fill in their credit card data. That’s where the data’s long journey starts.
Firstly, the data is moved to the payment gateway system, then it transfers to the bank the credit card serves in. After, the bank handles requests with payment systems like Visa or MasterCard. The primary task of those systems is to determine whether a customer has enough money on balance to pay for desired product or service. If users have a required amount of money, the bank verifies the request and reaches the merchant to approve this request.
Finally, the needed sum is taken off from the customer’s account and moved to the merchant’s business account within several days (usually, 2-3 days).
Both online and mobile sales are gaining popularity every day. According to Amex Digital Payments Survey, 73% of customers pay for products with cards or mobile apps, 82% of merchants offer contactless payment options. That’s why mobile app payment integration is becoming even more demanded.
Things to Consider Before Mobile Payment Gateway Integration
There are some specific things you need to know about before integrating a credit card payment gateway. Let’s consider them in detail.
1. Types of Merchant Accounts to Select
A merchant account lets you accept online payments and serves as an online bank account for your business. It keeps the money you get from sales in your app (usually, 3-5 days) and then hands them over to your business bank account. If you plug a payment gateway system, the transaction is firstly checked by your provider and then sent to your merchant account.
It should be noted that payment gateway solutions serve as security software aimed at preventing frauds and extending the online payment functionality. Besides, some merchant accounts allow you to utilize the basic online payment functionality and security capacities.
You can open the merchant account in the bank and integrate it with payment gateways if it’s required. Another variant is to use ready-made solutions offered by different payment gateway providers like PayPal or Stripe. These services provide users packaged solutions and support merchant accounts.
There are two merchant accounts you can select from based on your business needs.
- Dedicated merchant account
This type of account is designed exclusively for your business. However, it requires a lot of time and effort. You’ll need to go through numerous verification’s, including security ones.
Though this option lets you better control your finances. For example, you calculate custom payment processing commission rates based on your sales volume. Accordingly, the amount of fees depends on sales numbers. Moreover, it provides faster money transfers (up to 3 days compared to 3-7 days of other account types) and more opportunities for financial operations (account debiting, correction of transaction errors, and others).
- Aggregate merchant account
This type of account means that the money your business makes is combined with other businesses. It’s like a bank cell that’s used by several people. Thus, you have limited control over your finances, and money withdrawal takes more time. On the flip side, it isn’t so expensive and a time-consuming option.
2. Types of Goods You Sell
Goods you’re selling are worth considering regarding mobile app payment integration. For instance, if you sell digital content, you’ll need to meet Play Store or App Store policies to purchase via apps. The app that’s placed on those marketplaces can’t utilize third-party services. That’s why all transactions should be performed through Apple ID or Gmail.
Apple submits iOS developers to utilize a specialized framework, while Google offers a dedicated API to Android developers. Hence, all transactions will be made by the App Store or Google Play.
In contrast, if you intend to sell physical goods, you should appeal to mobile payment gateway providers.
3. Security Certificates
To manage customer banking information, you have to get a PCI DSS certificate. You need to pass through a complex verification process to get certified.
Firstly, you need to ensure your data system enclosing the customer credit card information meets the PCI DSS requirements. The next step is removing vulnerabilities that were detected by pentesters.
After all the fixes are completed, your company will be audited by a Qualified Security Assessor. Respectively, they decide whether your company will get certified or not.
How to Select the Right Payment Gateway?
So now, we’ve proceeded to the main question: “How to choose reliable payment gateways and what option is best suited for your business?”. Let’s take a look at the most popular ones.
- PayPal Payment Gateway
PayPal is a commonly used payment gateway solution. The company serves clients from over 200 countries and supports 25 various currencies.
Being free to get started, it offers an aggregate merchant account to sell the goods.
It charges 2.9% from the total amount of transaction and $0.30 plus per transaction. This system contains a bunch of features you can use in your mobile app.
- Braintree Payment Gateway
Braintree provides customers built-in fraud protection, payoffs in 2-3 days, and clients support in real-time. This mobile payment provider serves 40 countries and accepts 130 currencies.
This mobile app payment gateway contains software development kits written in six programming languages, including iOS and Android support. It’s a free payment gateway that charges no commission on transactions for the first $50K you earn. After your incomes run high beyond $50K, the service will charge you 2.9% and $0.30 per each transaction.
- Stripe Payment Gateway
Stripe is also a well-known payment gateway solution. It maintains authorization, checkout features for mobile applications and desktop, analytics and provides many other helpful features.
The fascinating option here is Stripe.js. It guarantees secure transmission data for web development.
Integrating SDKs Into a Mobile App
As you’ve already noticed, every provider has its own SDKs. Usually, they locate on the official website of the chosen payment gateway provider. Those SDKs simplify the work for your software development team since they include strong mobile libraries that process credit card data themselves. It implies that your team will spend less time on integration, and you’re not that disclosed to PCI compliance.
Those SDKs help to make payment forms for gathering user data. For instance, Stripe offers two approaches: you can either use their ready-made form component or design it from scratch (in this case, you have complete control over UX design).
Once again, if you’re going to sell digital content, your team will have to deal with specific payment gateway solutions depending on each platform (App Store or Play Store).
Mobile app payment integration can be a complex task due to its scalability and flexibility. But it’ll give you an opportunity to sell your product online and ensure secure, and fast transaction processing. Just make sure you consider all things before integrating a payment gateway into your mobile or web applications.