Importance of Payment Gateway Integration In Mobile Applications

Introduction

With industries undergoing large-scale digital transformation, it is not long before businesses and customers will completely shift to online marketplaces for purchases, with very few brick-and-mortar stores. This transformation is also supported by the one certain fact that payment gateways can now be easily integrated into apps and websites. Back in 2006, with most payments turning obsolete, a group of young entrepreneurs from the Netherlands created Ayden, the world’s first modern payment gateway. Fast forward to today, Ayden has processed almost 250 trillion dollars and powers corporate giants such as Uber and Spotify. Ever since, many successful payment gateways have been introduced in various industries and each one is more secure than the other. Let us first study about Payment Gateways and their functions.

Authorization

First and foremost, payment gateways confirm the customer’s payment information including bank account information, balance, and other details. This maintains and ensures the integrity of the gateway and transaction. These checks are performed in real-time and help detect fraud and breaches in the network.

Encryption

Since a lot is at stake in a business transaction, payment gateways often use robust encryption techniques and algorithms to secure sensitive customer information that is shared during any transaction. Secure protocols like TLS (Transport Layer Security) or SSL (Secure Socket Layer) employed by the payment gateway ensure a secure connection between the user and the gateway. This ensures that the data remains encrypted and safe from unauthorized and fraudulent access.

Payment Processing

Post authorization from the payment gateway, the next phase is where payment is processed. This includes the secure transfer of payment details from the user/customer to the merchant bank and back. The payment gateway also acts as a reliable medium between different stakeholders, including the issuing bank, acquiring bank, and card networks, to facilitate the transfer of funds.

Multiple Payment Methods

Payment gateways, these days, support multiple payment methods including credit and debit cards, online banking, and wallets along with alternative payment options. These versatile options facilitate customer interaction and ease up online purchases for customers. Merchant sites, on the other hand, can accept payments through different channels as per customer preferences thereby enhancing the overall user experience.

Quick Currency Conversion

Payment gateway transactions that are handled internationally are equipped with currency conversion services that convert the transaction amount from the customer’s currency to the merchant’s currency in real-time exchange rates. Quick online currency conversion ensures cross-border transactions and allows businesses to expand their customer base internationally.

Transaction Reporting and Analytics

New-age Payment gateways are known to provide comprehensive reports along with effective analytics tools that enable merchants to map and analyze transactional data. These tools help merchant sites study sales metrics such as sales, refunds, chargebacks, revenue, etc. These insights are crucial for businesses in making informed decisions and optimizing their payment processes.

Subscriptions Management

Merchants offering subscription-based services to their customers, often opt for payment gateways which can support recurring payments. They allow merchants to set up recurring billing cycles, automate payments, and manage customer subscriptions seamlessly.

Seamless Integration

APIs (Application Programming Interfaces) and various plugins in payment gateways facilitate simplified integration with e-commerce platforms, mobile apps, and web applications. Merchants can also install payment gateway into their existing systems and thus streamline their payment process.