Business & Startups

Payment Gateway Integration: Choosing the Best Provider | Sloboda Studio

In an increasingly cashless world, businesses need to provide customers with a quick, safe, and easy payment system. It also helps to reduce the loss businesses incur due to late payments. As of 2021, 49% of total eCommerce expenditure worldwide was paid using digital and/or mobile wallets. This makes it the most popular payment method.

Any kind of business that wants to monetize online needs to use a payment gateway. It will pool in the large segment of customers who prefer only online payments. In this case, a payment gateway determines the fee and speed of transactions, payment methods, and currencies that can be accepted. 

In this article, we will break down everything about payment gateway integrations and what you need to know about integrating it into your business. 

What is a Payment Gateway? 

A payment gateway is a mechanism that reads and transfers payment information from a customer to a merchant’s bank account. A merchant account is a dedicated bank account used to deposit money resulting from online customer purchases. It acts as a hub to facilitate the flow of funds between customers and merchants. Various security measures and encryptions are implemented to ensure transaction data safety. 

Payment gateways can perform the following types of transactions:

  • Authorization – This type of transaction is done to check if the purchasers hand enough money in their account to pay for the goods or services. Here, there is no actual money transfer. 
  • Capture – Here, the authorized payment is processed, which leads to the transfer of funds. 
  • Sale – This is a combination of capture transactions and authorizations. First, the cardholder is authorized. Then, the money may or may not be captured. 
  • Refund – This occurs when an order is cancelled, and the business has to make a refund to the customer’s account. 
  • Void – It is similar to a refund but happens when the funds are not captured. 

Online Payment Market Overview and Forecast for 2027

You may think that cashless payment methods are a recent innovation. You will be shocked to learn it originated in the second half of the 12th century. Italian merchants used notes called “Lettres de foire” instead of coins or precious metals to make transactions. The merchants used this method for security and logistic reasons. A cart full of coins and precious metal not only attracted unwanted attention but could be a pain to transport over long distances. Forward to the 21st Century, and the idea remains stagnant. However, the technology and methods of payments have changed. 

Cashless payment methods are definitely taking over the world. 

Over 80% of purchases that occurred in the US in 2022 were done with methods other than cash. The total transaction value of online payments is expected to show an annual growth rate (CAGR 2022-2027) of 12.31% resulting in a projected total amount of US$15.17tn by 2027. 
In 2021, over half of global e-commerce payment transactions were performed using mobile and digital wallets. This share is set to increase to more than 53 percent in 2025.

Payment methods in 2021, with a forecast for 2025

Payment methods in 2021, with a forecast for 2025, Source

Payment Processing Flow

Payment Processing Flow

The online payment processing infrastructure is much more complicated than what meets the eye. All customers see is the checkout page and some notifications from their bank apps. However, that’s just the tip of the iceberg. 

In reality, payment processing involves many other backend processes, multiple financial institutions, tools, and verifications needed to complete the purchase. 

For one of our projects, Uniting Health, our development team had to implement ACH payment. It is a specific bank-to-bank type of payment used in the US. We had decided not to outsource ACH implementation. So, our team had to perform it manually. For such implementation, we created our own payment verification system. Then, implemented both credit card and ACH payment methods through Stripe.

How It Happens

Here’s how the payment processing happens. Note that all these steps occur in just a few seconds after the customer presses the purchase button:

  • Customer. The customer clicks on the “Purchase” button and enters all the payment details. This data is encrypted and transferred to the merchant’s web server through an SLL connection. 
  • Merchant and payment gateway. The merchant sends data received to the payment gateway through an encrypted SSL (Secure Sockets Layer) channel. SSL is a protocol for establishing authenticated and encrypted links between networked computers. Here, tokens are stored instead of credit card numbers for security purposes. If any data has to be stored in the payment gateway, it is kept in secure storage. 
  • Payment processor. From the gateway, the data is sent to payment processors. These are third-party companies that provide payment processing services. They help to transfer information between the payment gateway and the merchant’s account. At this point, the payment processor sends the transaction to the card network (Mastercard, Visa, etc.). 
  • Card network. The card network is responsible for verifying transaction data and sending it to the bank that issued the consumer’s credit/debit card. 
  • Issuer bank. The consumer’s bank then approves or denies the authorization request. A unique code containing transaction status or error details is then sent back to the payment processor by the customer’s bank.
  • Payment gateway. The transaction status is then sent back to the payment gateway, which is then transferred to the website.
  • Customer and issuing bank. The purchaser then receives a notification from the bank about the transaction status through the mobile app or SMS. 
  • Issuer bank. It takes about two days for the customer’s bank to transfer the funds to the merchant’s bank.

Payment Gateway Integration: Every Type Explained

There are multiple types of online payment gateways, which have unique functionality. All of them need a different integration approach. For example, there are ones that use a redirect to the third-party and those that allow payments on the website:

Types of payment gateway integrations

Hosted Payment Gateway

When customers press the purchase button on an eCommerce checkout page, they are redirected to the payment gateway provider’s platform to finalize the payment. Once that is done, the customer is redirected back to the eCommerce website. This means that all the sensitive data storage and payment processing is done at the provider’s end. 

This method makes it easy and fast to provide digital payments without direct integration with the payment processing network. Also, your business does not have to worry about the safety of sensitive data or comply with security requirements. However, your business will have no control over the payment gateway.

Direct Post Payment Gateway

Here, the business uses a third-party payment gateway. However, customers are not redirected to another site to complete the payment. Once the purchase button is clicked, payment and customer information is sent from the website’s backend. Then, it goes to the payment gateway’s server for processing and storage. 

Customers are not redirected to another website. This make the process faster and more user-friendly. Also, your business does not need to store or process customer payment information. So there is no need to maintain PCI DSS compliance. However, your company will be limited in how it can customize payment options and checkout experiences. 

While working on the Cleaning Marketplace project, we had to implement and integrate a payment gateway system.

The client’s business model includes a payment that takes place after the cleaning is completed. So issues with conducting payments used to occur (for example, due to the customer’s insufficient funds). Plus, a cleaner’s payout happens in the same time frame as the customer being charged.

The solution to this problem was to provide a notification about a payment failure. Once a payment fails, it triggers an email notification about the unpaid cleaning. This notification invites the customer to log into the dashboard (link in the email redirecting the user to the PTH dashboard) and click on the “PAY NOW” button. 

In the dashboard, the customer can see the reason for the payment error. We used the Stripe system to define the types of payment errors. 

Self-Hosted White-Label Payment Gateway

As the name suggests, this is a white-label payment gateway solution which can be bought ready-made. It can then be integrated into the business’s website using APIs. The checkout and payment process occurs with the website. There are no redirects. 

It gives businesses much control over the processing and storing customer-sensitive information and payment data. However, there are also downsides to this type of payment gateway. Your company processes and stores all the data. It needs to pay close attention to security details and strictly comply with PCI DSS. Also, it becomes significantly time-consuming and costly to integrate a white-label payment gateway with older apps. To do this, lots of customization is needed. 

Non-Hosted Custom Payment Gateway

This payment gateway solution is built from scratch specifically for your business’s needs. It integrates directly into your website or app using custom APIs. Also, the checkout process occurs within the app. It gives your company complete control over the payment and can integrate seamlessly with legacy systems. Also, you don’t need to pay fees for intermediary services. Since you don’t depend on third-party payment processors, the security and operational risks are reduced. 

Even with all the benefits, this type of payment gateway solution comes with some flaws. Needing to build from scratch can be time consuming and requires lots of resources. Furthermore, your business is responsible for maintaining and supporting the payment processing infrastructure. It also needs to ensure complete compliance with PCI DSS. 

Choosing a Payment Gateway Provider to Integrate

How to choose a payment gateway provider in 2023

Payment gateways play a crucial role in the success of your business. So, it is important to do some research before settling for one. Here are some things to consider before choosing a provider:

Get Accustomed to The Pricing

Several financial institutions are involved in the payment process, making it complex. The payment gateway needs a fee to process and authorize transactions. All the different institutions that participate in the process require a fee. That is why this amount can become bulky. Usually, transactions are billed depending on the amount, type of product or service, and even location. 

The fees charged by each provider vary depending on their business model. Normally, you will get the following types of fees:

  • Gateway setup fees
  • Monthly gateway fee
  • Merchant account setup
  • Fee for every transaction processed

So it is crucial to thoroughly read and understand the pricing documentation provided by the payment gateway provider to avoid unwanted or hidden fees. 

Ensure Provider’s Transaction Limits Are Favorable

Fees and installation charges can’t be avoided. However, other financial aspects are critical when choosing a gateway provider. The transaction limit is one such option. Gateway providers often set a minimum and maximum amount for transactions. Merchants need to take note of both values depending on the types of product s or services they provide. 

For example, it is not advisable to select Stripe with a minimum transaction value of $0.50, such as when your business sells products for less than that amount. It will greatly affect sales of those products and possibly your company’s success. 

Review Merchant Account Options

A merchant account is an account your business opens to process transactions in the acquiring bank. Also, you are obligated to follow the credit card processing operational regulations set by credit card companies. 

You can open these accounts using payment gateway providers or banks that offer this service. So, the best course of action is to choose a payment gateway provider that offers a merchant account if you already have one. 

Ensure the Gateway Supports Payment Methods Necessary For Your Target Market Location

You want to choose a payment gateway provider that supports as many payment methods as possible. As we have seen above, mobile wallets have become the favorite payment method, followed by credit/debit cards. Furthermore, ensure that a payment gateway provider supports all the required credit card networks. You don’t want customers complaining that their payments are being rejected. 

Another crucial aspect is multi-currency support. If your business operates globally, you should expect people to use their local currencies for purchases. So, the payment gateway provider should support these options with or without any additional fees.

While working on the Property Rental Marketplace project, one of the main tasks was to optimize a complex payment system with a multi-currency flow. We connected the platform to a Stripe account and fixed the existing Stripe code to exclude miscalculations in payment.

Automatic currency conversion was created with the help of a library working with the Central Bank. This provided the most comfortable payment conditions for users.

Users can cancel three bookings for free, the fourth try will cost 15% of the total rental cost. The closer the check-in time is, the more the deduction will be charged when cancelling.

Our team has also created a prepayment function. This made it possible to pay 50% of the rental price 90 days before the start of the lease.

Consider Mobile Payments

Mobile payments get the funds from credit/debit card accounts. However, they are still considered another form of payment. Some of the most popular are Apple Pay and Google Pay. They have their own tokenization process. 

The tokenization process replaces sensitive client data. For example, a BAN is replaced with a meaningless substitute known as a token.

These services are not available in all countries. However, the major ones support all four main credit card networks. So, check the provider’s documentation to ensure that they support mobile wallets. 

Make Sure Your Product Type is Not Prohibited by The Payment Vendor

Most providers generally accept or consider two types of products – physical and digital. However, there are some rare exceptions, where the provider may work only with one type. In that case, merchants selling physical and digital products should avoid such providers. 

Most Popular Payment Gateway Providers

Nowadays, with the popularity of payment gateways increasing, hundreds are scattered all over the market. However, let’s check out the top, most reliable options:


Paypal homepage

PayPal Homepage

Customers will feel at ease choosing PayPal as a payment option on any site. This is because it is well-known and has been around for a while. The service is simple to set up, making it desirable for businesses, especially those just starting out. If business owners are hesitant to use new payment methods, PayPal offers some comforting stats. According to PayPal, companies that use their service have an increase in checkout conversion rate by 44%. 

PayPal is a good alternative if you have a worldwide customer base since it accepts credit/debit cards worldwide. With support from 200 countries and 25 different currencies, you can be confident that your customers will be well-served where ever they are located. 

The pricing model for PayPal is complex and needs different calculations for international transactions, micropayments, and platform usage. 

Depending on your volume and type of account, the fees may range from $1.90 to $3.49, with an additional $0.49 transaction fee for domestic transactions. For international commercial transactions, it is 1.50% of the total amount.

Amazon Pay

Amazon Pay homepage

Amazon Pay Homepage

It has a reputation for quick and simple payments owing to the Amazon online marketplace. Many clients will be familiar with Amazon’s checkout process. They enjoy the convenience of one-click checkout. Millions of individuals already have an Amazon account. Their ability to reuse payment information already saved in the users’ accounts means that the customer can expect a straightforward and simplified payment procedure. 

Amazon Pay is a wonderful option for merchants who want to customize their payment gateway. It interacts with your website’s API enabling you to customize the payment step with your own logo. The Amazon Pay fees are transaction-based and have an authorization and processing component. Domestic transaction fees are set at 2.9% + $0.30 for each transaction. For international transactions, which is set at 3.9%. There are no monthly or setup fees.


Stripe homepage

Stripe Homepage

This is a payment gateway that allows for extensive customization. It is ideal for businesses that want complete control over their website. With the website’s API, it is simple to integrate the service. ECommerce business owners may also combine it with their current ERP, invoicing, and shopping cart systems. 

Stripe supports payments in 150 currencies. This makes it an excellent choice for those who have a worldwide audience. It also has a Bitcoin plugin that lets customers pay in Bitcoin. However, the costs for non-EU cards are greater. 

Stripe is also PCI compliant, making it an all-around good choice. Its downside is that it is not very suitable for inexperienced users. 

Stripe charges 2.9% for the integrated package with an additional $0.30 per transaction. They have no setup fees. Also, Stripe offers a customized package for large businesses. 

We have over 6 years of experience working with Stripe. A good example is The Skills project. This educational platform produces and distributes online lessons from the world’s top athletes like Michael Phelps, Maria Sharapova, and Shaun White. It also collects payments from end-users for subscriptions. 

For this type of platform, we optimized and integrated Stripe:

When we first started working with the client, they were already using Stripe. The Sloboda Studio team extended the Stripe payment feature on the Skills website. This made it possible to do payment transactions from different countries.

We also implemented various payment mechanisms that enable the Skills to:

  • create the logic for the gift coupons and promo codes usage
  • generate discount computing system
  • optimize the payment process using a link that activates the discount only to new users

There was a difficulty with the query-display effect because some vital information (discounts, promo codes, etc) was stored in Stripe. If the discount needed to be deleted, there was no instant integration with the system, but a request for a Stripe came. We optimized this system to get an instant response.

We also helped integrate Stripe’s custom account with the Foody platform to allow users to make payments. Users can’t interact with Stripe directly; they use only the Foody platform.

Our team has enabled Stripe Account Link Integration. It automatically allows users to fill in the Stripe form if the user entered incorrect or incomplete information. This action reduces the number of rejected Stripe accounts that did not pass Stripe validation.

The payment function is currently valid only for the USA. However, our client plans to expand the platform’s coverage for countries where the Stripe system is also supported.

Shopify (Shopify Pay Installments)

Shopify homepage

Shopify Homepage

Shop Pay provides users with the option to pay for their goods in full at checkout or in instalments for orders from $50 to $17,500. Customers can choose between the following instalment payment options at checkout:

Four, twice weekly, interest-free payments for orders from $50 to $999.99.

Monthly payments from $150 to $17,500. Monthly instalment payments come with interests from 10 to 36% APR.

Mobile Payments

mobile payments

Mobile payment is a way clients use to carry out transactions from your eCommerce platform using smartphones, tablets, and even smartwatches. 

As it is often said, “necessity is the mother of invention.” Ever since the invention of the mobile phone, people have tried to go full mobile – from programming complex apps on the phone to performing financial transactions. And today, it has become one of the most popular payment methods worldwide.  

Types of Mobile Payments and How They Work

There are four main types of mobile payments:

NFC Mobile Payment

Near Field Communication (NFC) Mobile Payments are the way NFC-enabled point-of-sale and mobile device systems work together to process transactions. The encrypted information is passed from one device to another to complete payment. Apple Pay, Samsung Pay, and Google Pay are all mobile payments compatible with NFC technology.

Browser-Based Mobile Payments

Lots of smartphone browsers now have the ability to store card information and present it during checkout. It is a faster payment method on an eCommerce website. This is because customers don’t have to spend much time inputting card information. The payments are made through Card-Not-Present, which is added to the eCommerce mobile checkout page. 

In-App Mobile Payments 

These are similar to mobile browser payments. However, the card information is stored in the mobile app. Also, users enter their payment information once and it’s saved for future use. Lot of eCommerce mobile apps have this feature such as Amazon and eBay. Our company, Sloboda Studio, also implemented the same logic with in-app mobile payments for Split, the first marketplace for scooter rides in Los Angeles.

How We Integrated Different Payment Gateways in Our Projects


Veeqo homepage

Veeqo Homepage

This is an omnichannel retail platform for various merchants. It allows you to manage your orders from multiple channels and keep track of inventory from multiple warehouses. 

Our main goal was to develop user profiles in the retailers’ system, create orders, and generate invoices.


One of this project’s main challenges was reducing the time taken to process payments. Veeqo used to process payments manually. All the invoices used to be arranged via bank transfers or phone. This manual payment system required a lot of time and resources.

Our Solution

To solve this issue, we decided to integrate the Stripe payment system. It allows the use of different types of payments. Also, it is convenient for both the Veeqo team and Veeqo customers.

Our team has enabled Stripe Account Link Integration. It automatically allows users to fill in the Stripe form if they entered incorrect information. This action helps to reduce the number of rejected Stripe accounts that did not pass Stripe validation.


Started integration of React (as a front-end solution) and Stripe (as a payment system). We also connected AWS Lambda to unload Veeqo’s servers. Used Agile Scrum, one-call engineers, and our own expertise and initiative for effective communication. 

This platform has been acquired by Amazon and raised over $4 million in March 2019.


Salita homepage

Salita Homepage

This is a B2G (business to government) and B2C marketplace that offers access to different interpreters over video and phone conferences on a number of platforms (web, Skype for Business, mobile apps).  

The initial goal was to build a Minimum Viable Product (MVP) to showcase the most important features to the first users and investors. 


We needed to build a multi-currency flow function so that users from different countries, where there is a two-currency system, could pay and make a refund on the platform. 

Our solution

For well-regulated automatic multi-currency flow and exchange, it was important to adjust the central bank’s rate. Our team used Exchangerates.api library to convert currencies and transfer to the platform credit notes or make a money withdrawal.

Here’s how we added the payment gateway integration – Stripe:

  • We had to optimize a complex payment system that supports a multi-currency flow. To do this, our team connected the solution to a Stripe account and fixed the existing Stripe code to exclude miscalculations in payment. 
  • We also included automatic currency conversion using a library working with the Central Bank to create comfortable payment conditions for users.


Salita has raised more than $1.5M in two rounds of seed investments. The first in February 2018 – NOK2,9M and the second in May 2019 in the amount of NOK5M.


Safhyre homepage

This is an online platform for recruiting which connects employers with employees. SAFHYRE gives employers access to the database of job candidates.

The client’s main goal was to build an online recruiting platform from scratch. 


One of the main challenges during the development of this project was integrating a payment gateway system. This is because most of the payment providers don’t work in the United Arab Emirates. So, we had to find a payment system that was supported in the UAE.


After much research, we came across PayFort. It is a friendly payment system that is used in the UAE. However, many restrictions on the banking system are imposed by the OAE state. That is why building a subscription system demanded numerous PayFort approves. 

Plus, Payfort has some API peculiarities, like a lack of proper documentation, requests had to be processed both on front-end and back-end, and the URL feedback led to different places. We had to calculate the signature of the request manually. Also, there were typing errors in the Payfort API.


Our team digitalized the offline business by building a web application from scratch. Sloboda Studio provided SAFHYRE with a full development cycle, namely back-end and front-end development, design and QA. 

Custom Non-Hosted Payment Gateway: Is it Worth Creating From Scratch?

Building a payment gateway from scratch has its advantages and disadvantages.

Advantages Of Building From Scratch

No Payment Gateway Fees. When you get an off-the-shelf payment gateway like PayPal or Stripe, it often comes with sign-up costs and fees associated with each transaction. All of these extra fees can take a huge toll on your budget. Having your custom-built payment gateway will help avoid all these additional costs. 

Custom Features – Even off-the-shelf payment gateways with minimal fees often have many restrictions. For example, a third-party payment gateway may not support recurring payments or multiple-currency transactions. This will significantly limit your ability to do business. However, building a payment gateway tailored to your business needs will go a long way. Also, you can add and remove features freely. 

Offer Payment Gateway Products. Since you have full ownership rights to the custom-built payment gateway, selling it as a product to other businesses and agents is possible. It will bring in additional revenue to your business. 

Disadvantages of Building From Scratch

Despite all the advantages, there are also some downsides to creating it from scratch. One of the biggest concerns are development and maintenance costs. Development cost may be a one-time commitment. However, not all small and mid-sized businesses and startups have that amount of funds to spare. 

Building a payment gateway from scratch makes sense for big corporations like Amazon and Shopify. This happens when the number of fees becomes so negative that it’s cheaper to build a payment gateway from scratch. Another downside is the lengthy certification process needed to integrate with payment processors. 

The hands-on cost and challenges in the certification process make building a payment gateway from scratch less favourable. To compete with others like PayPal and Stripe for market space, then it is worth building from scratch. If not, the best option is to use one or more payment gateway providers. 

Need to integrate a payment gateway?

Contact us


How to Get Payment Gateway Compliant With Industry Requirements

Your business must comply with industry standards to process and store sensitive financial data. It must comply with Payment Card Industry Data Security Standard (PCI DSS) to process card payments. Here are some steps to become compliant:

  • Set your compliance level. Compliance comes in four levels determined by the number of safe and successful transactions your company has completed. The transactions don’t count if it is not done through Visa, MasterCard, Discover Card, or American Express. 
  • Get acquinted with the PCI Self-Assessment Questionnaire (SAQ). This is the set of requirements needed for compliance. 
  • Complete the Attestation of Compliance (AOC). After studying the SAQ, you need to take the AOC exam. There are nine types of AOC for businesses. 
  • Conduct an audit by the Approved Scanning Vendor (ASV). 
  • Submit your documents to the card associations and acquire. Once all is done, you need to submit the SAQ and AOC, together with the ASV scan report. 

In a Nutshell

Payment gateways are a vital part of the digital eCommerce ecosystem. They reduce some barriers to eCommerce by providing a safe and secure method for customers to pay for goods and services online. 

The benefits of payment gateways can’t be contested. However, the decision to get an off-shelf or custom-built payment gateway system will depend on the specific needs of your business. Sloboda Studio has been in the app development market for over 12 years. And we are experts in building solutions from scratch. We have built many different solutions, like Veeqo and Salita, that require payment gateway integrations. Contact us if you want to build a platform that requires payment gateway integration.

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