Updated time: Sep 1, 2020 , 10:07 (UTC+03:00)
Business nowadays have changed from traditional payment systems (such as direct bank transfer or cash) to online payment gateways because of the efficiency and convenience of instant payment, secure transfer, credibility and other valuable benefits.
A payment gateway is an application that is used to complete and secure transactions. The main purpose is to authorize payment and process credit/ debit cards for online business or brick-and-mortar stores.
Below are the 4 different types of payment gateway with its pros and cons, you can consider which one is the most suitable for your business:
Hosted gateways of payment direct your clients away from the checkout page on your site. When the client clicks the link of gateway, they are redirected to the Payment Service Provider (PSP) site. The user fills out his or her payment information here; and the customer is routed back to your website to complete the checkout process after the buying process.
Also read: How to integrate Payment Gateway in website?
In this form of gateway, the payment information inside the merchant's website is gathered from the user. Upon requesting the information the collected data will be sent to the URL of the payment gateway. Many gateways need a particular format for the payment data, while others need a hash key or a hidden key.
Customers input their credit or debit card details directly on the merchant's checkout page with API hosted payment gateways. Payments are handled using API (Application Programming Interface) or HTTPS queries.
Local bank integration gateways redirect the customer to the website of the payment gateway (the website of the bank), where they input their payment information and contact information. The customer is redirected back to the merchant's website after making the payment, with payment notification data sent upon redirection.
Quick and easy to install - good for small businesses requiring a simple one-time payment system
Basic features only - usually do not allow returns or repeated payments, so it's not suitable for wholesalers
Above all, every type has its own advantages and disadvantages. The payment gateway you select will be based on your business model, the types of features you need and how much you want control over the payment experience of your customers.
Nowadays, a self-hosted payment portal would be the most seamless platform for online companies and wholesalers. Because it allows the customer to finish a single page transaction and gives the merchant control over the customer experience.