Written By :Appsierra

Sat Dec 16 2023

5 min read

What is Payment Gateway Integration: How Does It Work?

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payment gateway integration

Digital transactions have been a big concern for most online merchants. They often look for a payment system that is easy, safe, and quick for people to use. Therefore, they must find the best payment methods to meet the needs of their business and customers. So, in this blog, we will help you learn about the basics of payment gateway integration with mobile apps. Continue to read for more.

Over the last decade, mobile solutions have become trending in the business world. However, they want secure and transparent payment modules to process digital transactions. So, most mobile business owners find payment modules a top concern for their seamless trade. That is when the payment gateway integration comes to the scene. Payment gateway ensures instant and secure digital payment transfers.

Since online shopping is in high demand, merchants want to give users a matchless experience from their marketing side to payment. They like to offer a secure, safe, convenient, and flexible service. Therefore, most startups and large-scale firms are looking for ways to build a payment gateway for their businesses. It helps them reach more loyal customers and stay on top of the market.

So, in this blog, you will observe more on payment gateway through the following topics:

  • What is a payment gateway?
  • How does the payment gateway work?
  • What are the types of payment gateway?
  • How does a payment gateway benefit your business?
  • How to integrate payment gateway in mobile application?

What is Payment Gateway Integration?

A payment gateway is a service portal serving as a channel to send and receive money. In the ecommerce domain, the transaction takes place between merchants and customers. It ensures that users can transfer money to the merchants securely and safely. Besides, it keeps all financial data safe from hackers or attacks.

Simply put, we can define a payment gateway as a service that enables users to pay for the purchase they made on a mobile app development. On the other hand, merchants can accept payments through the gateway. As a result, it offers both the users and app owners a protected and safe platform to send, receive, encrypt, and process data. Moreover, it gives them an instant service to authorize and process payments with a smooth transaction flow.

Further, payment gateway integration is similar to electronic fund transfers since it allows users to make secure digital transfers. So, buyers and sellers can start their payments through various modes, like mobile banking and online banking, debit or credit cards, UPI, or wallets. Therefore, app owners or merchants must integrate a payment gateway into their app for a smooth transaction process. With the help of service providers like Appsierra, you can achieve safe integrations with payment gateways.

A trustful service provider ensures all the info and data are secure. They help you fill all the gaps the hackers can use to exploit your app. Besides, you can build your business empire to great heights since users start to believe in your service and products. So, hire the right team and enjoy the best.

How does a Payment Gateway Work?

You will see how the money gets processed via different steps in the mobile app with the help of payment gateway integration. The payment processing involves multiple tools and financial institutions before it is complete. In this section, we will show the payment processing flow for you to get more insights:

Customer

First, the customer adds the product they want to purchase and fills in necessary data like card details and CVV to proceed with the transaction. So, here, the transaction data is secure and encrypted from unauthorized access. As a result, the merchant server will get the data through an SSL connection.

Payment gateway

The merchants pass the transaction data to the payment gateway through another secure SSL connection. On the other hand, the payment gateway stores these data as tokens.

Payment processor

The payment processor is a third-party player that connects to the merchant's account and payment gateway. As a result, they help transfer the data back and forth between the payment gateway integration and the merchant's account. So, here, the payment processor will send the info to the card network.

Card network

Card networks involve services like Visa and Mastercard. So, here, the card network passes the transaction data to the issuer bank.

Issuer bank

The issuer bank either accepts or rejects the request they got from the card network. As a result, they sent a code with the transaction status to the payment processor.

Payment gateway

Here, the payment gateway gets the information regarding the transaction status. As a result, the gateway sent this data to the website.

Customer and bank

Finally, the customer will receive a message with the transaction status through the payment system. As a result, the merchant will have the money transferred to their account within days.

Now, we will learn about the types of online payment gateway integration.

What are the Types of Payment Gateway?

You can select the best payment gateway type based on your business needs and structure. Some payment gateways require maintenance and support, while others need host support. The following are the different types of payment gateway:

Hosted payment gateway

The hosted payment gateway redirects the customer from the merchant's app to the payment gateway service provider's page. The customer can fill in the relevant card details. After the payment completion, they will receive the order confirmation message from the app.

Self-hosted payment gateway

This payment gateway lets the customer enter the card and bank details in the merchant's app. After the payment process is complete, they will receive instant order confirmation. As a result, it provides customers with a quick checkout process.

API-hosted gateway

The merchants have complete control over the purchase procedure in this payment gateway integration. In other words, the merchants handle the payment details and processes on the website using API development.

Local bank integration gateway

The local bank integration gateway redirects the customer to the page in the merchant's app that stores the contact and payment data. Once the payment process is complete, the customer gets redirected to the merchant's website with a confirmation message.

How does a Payment Gateway Benefit your Business?

Most startups and large-scale firms gained more benefits from payment gateway integration. Below are the key advantages you will get from the payment gateway:

More convenience

The users can shop and pay for your product whenever they need it if you integrate payment gateway in app. As a result, it adds comfort both for your customers and you.

Enhanced security

Online payments have been a big concern for most app business owners since there have been surging cases of credit card fraud. However, with the help of payment gateway integration, they get safe and secure digital transactions.

Instant payments

Payment gateway ensures instant and secure digital payments without hassles. As a result, it helps the users and the merchants have a seamless and trouble-free transaction.

How to Integrate Payment Gateway in Mobile Application?

As discussed before, a payment gateway adds more benefits to your online shops. You can enhance the user experience by providing them with a secure and instant transaction option. Therefore, you must incorporate a payment gateway into your app with the right service provider. So, let us explore the steps to integrate a payment gateway into your mobile app. They are as follows:

Analyze your needs

The first step to integrating a payment gateway into the app is to assess your company's needs. Therefore, you can discuss with the stakeholders and collect data to understand the basic requirements for your app payment system. Besides, you can find the conflicts in your app, regulatory risks, and solutions for seamless online payment.

Planning

Here, you can plan the project's budget, time, and deliverables. Besides, you can decide on the objectives and KPIs of the project. As a result, it helps you design a perfect payment gateway for your online app.

Design the payment gateway integration

After planning, you can design the ideal payment system for your online app based on the payment gateway type. You can choose hosted, self-hosted, API-hosted, or local bank integration payment gateway. Besides, you can create appropriate features and architecture for the custom payment gateway.

Choose the right tech stack

You can select the right tech tools and frameworks after you design the payment gateway. Therefore, you must explore the market for available options and choose the one that matches your needs.

Implementation and testing

You can develop a custom payment gateway according to your predetermined designs and plans. Besides, you can build the apt features and elements that define your payment system. After the development process, you must test to ensure there are no mistakes or bugs in your payment gateway integration.

Support and maintenance

With the help of service providers like Appsierra, you will get constant support and maintenance. Besides, the team will provide cutting-edge solutions based on your changing needs and demands.

Conclusion

Online payment gateway integration has relieved the ecommerce business world. It offers a safe and instant digital transaction for both merchants and users. Besides, the payment gateway causes no hassles or worries for the customers like traditional payment systems.

So, if you plan to integrate a payment gateway in websites or apps, take the help of the right service providers. With Appsierra, you will get the finest service for your needs. Our developers will offer you tailored-fit solutions for your app. So, contact the experts and get an unrivaled experience.

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