Secure Payment Gateway Integration: How to Make It Work
The Internet has taken the world by storm. These days, people prefer sitting in the comfort of their homes and shopping online rather than physically going to the store.
Well, the changing scenarios have made online activities a very critical part of the shopping ecosystem. Especially when there is a raging pandemic outside, people tend to play it safe and prefer online transactions. But for that to happen, the online payment frameworks must be robust and secure to ensure seamless transactions, and This is where the payment gateways work their magic.
They provide the entire payment processing activity for the online store. There are numerous essential tasks that payment processes take care of to securely and steadily process payments for merchants.
A non-user-friendly checkout system increases the churn rate heavily. According to Invespcro,
More than eleven percent of the customers abandon their shopping carts because of a complicated checkout system.
Twelve percent, if the information required is hefty
Seven percent, if there aren't adequate payment options
Fourteen percent, if there is no provision of a guest payment option.
Statista estimates that by 2021, 54 percent of all e-commerce retail will happen via mobile devices. Thus, it is essential to have a mobile payment integration in your application that is user-friendly and secure at the same time.
What is a Payment Gateway?
A Payment Gateway is a technology that enables the capturing and transferring the payment data from the customer to the receiver. It then transmits the payment status, i.e., acceptance or the decline, back to the customer.
The payment gateway securely validates the customer's card or payment details. Also, it ensures the availability of funds and ultimately enables the merchants to get paid. It acts as a bridge between a merchant's website and its acquirer. Also, It encrypts and keeps sensitive credit card and other payment details secure, ensuring the safe passage of information from the customer to the receiving bank via the merchant.
Types of Payment Gateways
There are generally three types of payment gateways.
One is redirected to another website, typically a payment service provider, clicking the payment option in this payment gateway type. For example, Redirects might include Bluesnap, PayPal Payment, etc., as options. Let's assume a gateway redirecting a customer to a PayPal payment page to handle the entire transaction involving processing and paying, and it becomes a "Redirect." It is an advantage for the retailer because of its simplicity. A business uses a Redirect gateway for the integration of convenience and security. Still, the process also indicates less control for the merchant and an added step for customers.
2. Checkout on site and payment offsite
Growing businesses just on the verge of getting started with eCommerce allow a third party to handle the payment processing because of ease in setting it up. The others do all the heavy lifting, including maintenance of security protocols and privacy liabilities. PayPal and Amazon Payments are amongst the most prominent payment processors. One can't undermine the trust factor of using well-known players to handle customer transactions.
Consumers like to deal with companies they are aware of and trust. Not needing a merchant account because you aren't accepting credit card payments is another advantage. The disadvantage lies in not being able to control the user's experience through this payment gateway. Instead, it would be at the mercy of the offsite gateway's quality and twists.
3. On-site payments
Large thriving businesses and corporations tend to use on-site payments entirely handled on their servers, including all the necessary steps from checkout to payment processing on the customer's behalf work through your system.
The retail segment has a cart abandonment rate of about 75 percent. Improvements made to the shopping experience result in dramatic changes in the bottom line. It is especially true for a retailer with high sales volumes. When the payments are handled on-site, the options need to be understood along with the responsibilities.
Payment Gateway Integration
There are four general methods to integrate a payment gateway. There are two significant factors by which all of them differ. Them being
Whether one should comply with the necessary financial regulations
The experience held concerning the checkout and payment procedure
1. PCI DSS Compliance
Payment Card Industry Data Security Standard (PCI DSS) is suitable for businesses that solely need a payment gateway, excluding the need to store or process payment data. The payment service provider would manage all the processing and regulatory burden.
But if one plans to deal with sensitive financial information, there would be a need for compliance with industry regulations. It is also critical for processing card payments. Four prominent card associations devised this security standard, including Visa, MasterCard, American Express, and Discover.
For PCI compliance, one needs to adhere to 5 steps:
1. Defining your compliance level: The number of secure transactions determines different compliance levels. Transactions are valid if done via MasterCard, Visa, American Express, or Discover cards, and the criteria being many successful transactions.
2. Analyzing the PCI Self-Assessment Questionnaire: SAQ is a combination of requirements and sub-requirements. The New version has 12 critical needs.
3. Wind up the Attestation of Compliance: AOC exam performed after reading the conditions. There are nine types of AOC for businesses in general. The one for retailers is AOC SAQ D - Merchants.
4. External Vulnerability Scan conducted by the Approved Scanning Vendor (ASV)
5. Submitting documents to the receiver bank and all the card associations involves the ASV scan report and the filled-in SAQ and AOC.
2. Hosted gateway
A hosted payment gateway works as a third party. It needs the customers to leave the website for the purchase, and it's the instance when a customer is redirected to a payment gateway on the web page to put in the payment details. When the data regarding the transaction is finally with the customer, redirection to the merchant's page takes place. Here the checkout is finalized on transaction approval.
Integration: Integration guides are present on the vendor's websites, but connections are through API. For example, the PayPal Checkout function suggests Smart Payment Button as a form of integration. It's a piece of HTML code that implements a PayPal button on the checkout page.
3. Direct Post method
It is a method that allows a customer to shop without leaving the website as there's no requirement for PCI compliance. Direct Post presumes that transaction data is posted to the payment gateway after being clicked on by the customer. The information is sent to the gateway and processor instantly without being stored on the personal server.
How to integrate: The vendor set the API connection between the shopping cart and the payment gateway to post the card data.
4. Non-hosted Method
A payment gateway with integration means the absence of third parties at the payment checkout stage. Companies use PCI DSS compliance acquired using integrated gateways, which means they take care of storage, security, and initial verification for the transactions—finally, installed using a payment gateway solution that's available on the merchant's website.
How to integrate: Integration performed using APIs to your server. It will require an engineering team for integration. Maximum vendors have detailed integration guides, API references, and developer portals.
There are some inevitable rules to be followed by both sellers and customers to secure their businesses and carry out secure and robust transactions. Companies must use the described method for consumers to securely buy products or services through their website or mobile app directly.