Develop own payment Gateway

Have you been trying to build a payment gateway? Look no further! We've outlined the pros and cons for you so that you can make an informed decision.

Build vs Buy – Is Building a Custom Payment Gateway Right for You?

Should you build, or buy? This is the million-dollar question.

There are several maintenance and developmental costs involved in building your own payment gateway from scratch. You’d be paying much less to use an external payment gateway system than you would if you were to create a payment gateway system yourself.

It can get very expensive to create your own payment gateway system from scratch. However, opting for a custom platform will provide you with the solutions that you require without breaking the bank. So, if you were to invest in a custom platform rather than a newly developed platform, then you’ll be investing in a long-term product that is optimized to meet your specific business needs.

Navigating the Payment Gateway Decision: Custom vs. Off-the-Shelf Solutions

In the dynamic world of digital commerce, a payment gateway serves as a pivotal tool, enabling merchants to swiftly, securely, and effortlessly accept digital payments. The fundamental element of a reliable payment gateway revolves around its ability to handle transactions while ensuring the security of both customer funds and sensitive data. While a custom payment gateway entails a more substantial investment in terms of time and capital, it can significantly propel your business towards growth and prosperity by fostering customer trust and facilitating seamless transactions.
Today's market offers a multitude of payment gateway options, each presenting its own unique advantages and drawbacks, thereby influencing the range of services you can offer through your chosen platform. Assessing the pros and cons of various off-the-shelf software solutions can be a time-consuming and painstaking task.
In the sections that follow, we will delve into the merits and demerits of opting for a custom payment gateway, explore the essential components integral to a payment gateway portal, shed light on the key differentiators to consider when selecting your payment gateway, and elucidate the specific requirements and preferences of merchants in this ever-evolving landscape.
Examining the Advantages and Disadvantages of Developing Your Own Payment Gateway

  • 1. Savings on Payment Gateway Fees: Off-the-shelf payment gateway solutions often come with substantial sign-up costs and transaction fees, which can gradually erode your profits. Building your own payment gateway allows you to sidestep these long-term fees and upfront expenses.
  • 2. Custom Features: Even if you manage to find a reasonably priced off-the-shelf product, you may still encounter limitations and additional fees. For instance, third-party payment gateways might not support features like recurring payments or multi-currency transactions, potentially restricting your transaction capabilities. In contrast, a custom payment gateway offers the flexibility to tailor and integrate new features according to your specific business requirements.
  • 3. Product Offering Potential: With your own payment gateway, you have the option to market and sell your custom solution to other merchants, ISOs (Independent Sales Organizations), and Agents, potentially creating an additional revenue stream.
  • 1. Payment Gateway Development Costs: Developing a payment gateway from scratch incurs ongoing maintenance and development expenses. The initial investment for creating your payment gateway is typically higher than the fees associated with using an external payment gateway. However, opting for a custom platform is essentially an investment in a long-term solution optimized to precisely meet your company's unique business needs.
  • 2. Payment Processor Integration & Certification Costs: Integrating your payment gateway with payment processors is a time-intensive process that involves navigating a lengthy certification procedure. In contrast, using an off-the-shelf payment gateway is usually more straightforward and expedient in this regard, as you're essentially paying for the convenience of a fully developed and established payment gateway.
  • 3. Handling Settlement Reports: Payment processors typically provide settlement reports in a raw format, which can require additional effort and resources to process and analyze.

In weighing the decision to create your own payment gateway, it's essential to consider these pros and cons to determine the best approach that aligns with your business goals and budget.

Crucial Elements of Payment Gateway Portals

  • 01
    Integration with Multiple Processors

    The ability to integrate with various payment processors is fundamental for payment gateway portals. This flexibility allows merchants to choose their acquiring banks for settlement accounts, offering options that align with their specific needs and preferences. Furthermore, it enables businesses to offer competitive transaction fees since different payment processors have varying interchange fees, often influenced by factors like the merchant's transaction volume.

  • 02
    Security - PCI Compliance & Fraud Management

    Security is paramount in any payment gateway portal. PCI compliance and robust fraud management mechanisms instill trust in both merchants and their customers. The inclusion of fraud detection tools within payment gateways helps prevent chargebacks and other issues stemming from fraudulent transactions. To ensure security and compliance, developers should adhere to best practices and secure coding procedures during gateway development. Key considerations include:

    • Data retention periods.

    • Data anonymization.

    • Restricted access to customer data for employees and third-party providers.

    • Transparency regarding the purpose of storing personal data.

    • The ability for customers to request their data be removed (the "right to be forgotten").

  • 03
    Scalability for Adding New Features

    Adaptability to the evolving landscape of online payment processing is essential. Payment gateway portals must be scalable to accommodate emerging payment methods and market trends. This includes handling surges in transactions during peak events like Black Friday or Tax Holiday Sales. Preparing for the increasing acceptance of innovative payment methods such as Bitcoin and contactless payments is crucial. Merchants need payment gateways that can be easily customized and updated to stay ahead in this dynamic industry.

  • 04
    Disputes, Chargebacks, and Arbitration

    An effective payment gateway should offer an interface to manage and report disputes from issuing banks. This feature empowers merchants to efficiently address and resolve payment-related disputes and chargebacks, ensuring smoother transactions and customer satisfaction.
    Incorporating these essential components into your payment gateway portal will not only enhance your offering but also empower merchants to navigate the intricate world of online payments confidently and securely.

Common Pitfalls in Payment Gateway Portals

  • 01
    Limited Processor Options

    Payment gateways tightly integrated with a single processor face challenges in offering competitive fee rates to merchants. Moreover, such gateways often lack the flexibility to provide multiple choices for establishing settlement accounts between banks and merchants. This limitation can hinder merchants from optimizing their financial operations.

  • 02
    Manual Processing of Settlement Reports

    Another prevalent pitfall is the manual processing of settlement reports received from processors. This cumbersome task involves parsing data to make it comprehensible, which can be time-consuming and error-prone. Automated solutions are essential to streamline this process efficiently.

  • 03
    Lack of Recurring Payment Support

    In today's business landscape, recurring payments are a staple for many merchants. However, payment gateways that do not support recurring payments, or offer secure tokenized methods for handling them, may not meet the needs of modern businesses. This omission can inconvenience both merchants and customers.

  • 04
    Absence of an Off-Site Payment Interface

    Many merchants prefer to employ an "off-site payment interface" or a dedicated "pay page" within a payment gateway. This feature allows them to redirect customers for processing ad hoc payments securely. Payment gateways lacking this functionality might not align with merchant preferences and can result in a less user-friendly experience.
    Avoiding these common pitfalls in payment gateway portals is essential for merchants aiming to streamline operations, enhance customer satisfaction, and maintain a competitive edge in the ever-evolving landscape of digital commerce.

Key Distinctive Factors in a Competitive Market

  • 01
    User-Friendly APIs for External Integration

    In a crowded market, a standout feature is the provision of user-friendly and accessible Application Programming Interfaces (APIs). Ensuring that merchant applications can effortlessly integrate with your payment gateway through a straightforward API enhances user experience and encourages wider adoption.

  • 02
    Enhanced Security, Including 3D Secure Transactions

    Security is paramount, and merchants are always on the lookout for robust measures that can help reduce chargebacks. The incorporation of 3D Secure transactions, which provide an additional layer of authentication, can be a compelling feature that sets your payment gateway apart.

  • 03
    Effective Dispute Resolution and Chargeback Management

    Merchants require an efficient and user-friendly interface for handling disputes and managing chargebacks. Providing them with a seamless mechanism to view, report, and resolve such issues can be a significant differentiator in the market.

  • 04
    Off-Site Payment Interface

    Many merchants prefer an "off-site payment interface" or a dedicated "pay page" within their payment gateway. This feature simplifies the submission and processing of ad hoc payments, contributing to a smoother and more user-friendly payment experience.

  • 05
    Support for Secure Recurring Payments

    In today's landscape, supporting recurring payments is vital. Merchants often seek solutions that do not necessitate storing customers' credit card details on their own sites. Offering a tokenized approach for accepting recurring payments can be a compelling value proposition.

  • 06
    Round-the-Clock Customer Support

    Responsive customer support is a critical factor that merchants consider. Availability of round-the-clock customer support ensures that any potential glitches or issues on the payment gateway side can be swiftly addressed. Integrating solutions like Zendesk during the custom gateway development stage can alleviate the need for further integration efforts down the line, enhancing the overall customer support experience.
    In a competitive market, distinguishing your payment gateway through these key features can attract merchants seeking efficiency, security, and seamless integration for their businesses.

Merchant Expectations in Payment Gateways

  • Having a customized payment gateway tailored to your specifications can be an invaluable asset for your business. It empowers you to offer a unified, all-in-one solution for point-of-sale (POS) and payment processing, which you can present to merchants as a compelling alternative to their existing payment gateway providers.

  • However, to entice merchants to make the switch from their current providers, your payment gateway must meet specific criteria. It should prioritize security measures to minimize the risk of chargebacks, provide a wide array of options for selecting an acquiring bank to establish settlement accounts, offer competitive fees, ensure swift settlement processes, provide exceptional customer support, and deliver top-notch reporting capabilities.

  • Developing a customized payment gateway amplifies your business capabilities. By imbuing your payment platform with features that support financial operations, such as streamlined settlements, account balance management, and efficient payout processes, you significantly enhance the value proposition of your tailored solution.

  • For further insights into payment gateway and processing solutions, please visit

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