If you’re one of those business owners who likes to take full control of operations, consider building your own payment gateway from scratch. This offers the ultimate in customization, but it’s also important to be realistic about the challenges that come with it. Here’s how to create a payment gateway for your website and some tips to keep in mind.
What is a payment gateway?
Before you decide to create your own payment gateway, it is helpful to outline the intended function. A payment gateway is the system that allows your website to collect credit and debit card payments. It serves as an intermediary between the customer, the company and the payment processor. This involves providing a payment gateway or checkout page where customers submit their payment details, encrypting that sensitive data and sharing it with the payment processor or bank. If you are creating your own payment gateway, you need to keep these features in mind and make sure it is compliant with PCI requirements and the latest anti-fraud laws.
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So what types of businesses might be most interested in to learn how to create payment gateways? Typically, these are larger companies that don’t want to rely on third parties, or those that are experiencing rapid growth and need a custom solution to meet their unique needs.
How to create a Payment Gateway
The specific steps to create a payment gateway depend on your business needs, but most companies use a process like the following.
1. Build your payment gateway infrastructure. You need a server to host your gateway, whether it’s your own or through a third party. If you use your own server, you need to think about testing and maintaining all associated data centers.
2. Choose a payment processor. A payment gateway works hand-in-hand with a processor to complete online transactions. This can be a financial institution, a card network or an independent processor. In any case, you must request the processor’s API documentation and follow the implementation instructions. You also need to develop an external API that facilitates the transfer of customer payment data.
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3. Create a customer relationship management (CRM) system. With the basics of payment processing in place, you need to start thinking about building a custom tool to manage transactions and customer data. A good CRM system is an organized customer database that helps keep customers – and their preferred payment and contact details – in one place.
4. Implement security features. Remember that if you create your own payment gateway, you are responsible for all cardholder data. Therefore, it is extremely important to implement tools like tokenization that keep credit card data separate from your online store’s server. With tokenization, credit card numbers are replaced with anonymous tokens. You must also follow all PCI-DSS standards when handling credit cards.
5. Obtain the necessary certifications. In addition to the PCI exam, you must apply for a 3DS certification from EMV (Europay, Mastercard, Visa). This international certification is required to process customers’ bank cards with a chip.
Pros and cons of building a custom payment gateway
Is building a payment gateway right for you? There are several pros and cons to consider.
Create payment gateway benefits:
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Lower monthly fees over time and Fees per transaction
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Full control over payment processing
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The ability to create your own custom functions
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You can sell your payment gateway services to other companies for additional income.
Create a payment gateway all required certifications, developer fees and audits
Long setup time between UX development testing and ongoing maintenance
Requires more manpower than an Out -of-box solution
Responsibility for security rests solely on your shoulders
Create a payment Gateway: Alternative Options
Whether you’re short on time, money, or skilled developers, it is It’s not much easier to pay for a payment gateway like GoCardless than to build your own. GoCardless offers a pull-based direct debit solution that doesn’t suffer from the high transaction fees and failure rates that card payments are subject to. It also offers an Instant Bank Pay service for same-day payments. This gives you instant payment confirmation for peace of mind. It also saves money as it’s 54% cheaper on average than comparable online card transactions.
We can help
GoCardless helps you automate payment collection and reduce the administrative burden your team has to deal with deal with it when it comes to bills. Find out how GoCardless can help you with ad hoc payments or recurring payments.
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