According to Statista, nearly 73% of people make online purchases with their mobiles in 2021, and that number continues to rise. Most of these purchases are made through mobile payment gateways. PayPal alone has 403 million registered accounts worldwide in 2021, whereas it started with just 84 million in 2010.
In this article, we talk about the things to consider before integrating payment gateways and the questions you should ask yourself before choosing one. We will give you examples of the world’s most popular providers and an algorithm for integrating a payment gateway.
What Is a Mobile Payment Gateway?
A mobile payment gateway is a mechanism that allows buyers to pay for purchases from the app directly and safely. It also enables sellers to accept online payments.
There are several participants who help to accomplish money transfers and take care of secure data processing:
• The issuing bank checks whether there is enough money on the buyer’s balance.
• An international payment system confirms or rejects the transaction.
• The merchant bank credits the funds to the seller’s account.
The payment gateway is needed to enable payments by credit and debit cards as well as e-wallets, bank transfers, and local pay.
Mobile Payment Gateway Integration: Things to Consider
The type of merchant account, the things you want to sell, ease of integration, and security certificates are something to think about before integrating a payment gateway. Let’s take a closer look at these factors.
The Merchant Account Type
Aggregated and dedicated seller accounts are the two types suitable for different business needs. The first one provides a smooth route but has limitations, such as longer money transfer times. If you require a more dedicated gateway, faster funds processing, and more extensive control over finances, the latter will do. Although dedicated accounts are more costly regarding purchase and implementation, they also have their advantages.
What You Want to Sell
If you are dealing with physical products or services, you can always integrate some of the popular payment processors such as Stripe, PayPal, Visa, and MasterCard. However, if you are selling digital goods via an application distributed either by Apple App Store or Google Play Store, all the transactions must go through the particular user accounts via Apple ID or Gmail.
Apple suggests iOS developers use a specialized framework and Google offers a dedicated API for Android developers.
Ease of Integration
The payment gateway integration process should be simple, straightforward, and take minimum developer time. Another important aspect to pay attention to is the SDK size – it should be light to occupy minimum space on users’ mobile devices. Also, make sure that your payment gateway SDK provides support for your required platform and framework. Pick the one that offers multi-platform and multi-framework support.
How to Choose a Mobile Payment Gateway?
We have put together a checklist of five questions you should ask yourself before choosing a particular mobile payment gateway.
What Is Your Target Audience?
Before selecting a mobile payment gateway provider, make sure it works in the location with your target audience. For example, WePay is supported in three countries, Stripe – in 46 countries, while PayPal works in over 200 countries. Some payment gateways might be more popular in certain countries. For instance, TSYS in Great Britain and PayPal in the USA. Also, make sure that your payment gateway providers support multi-currency payments if you operate globally.
Does It Have Security Certificates?
The gateway works with vulnerable financial data, so it has to be trustworthy. Pay attention if the provider has SSL (Secure Sockets Layer) and PCI DSS badges. All transactions should be secured with the SSL protocol, which helps to encrypt the information so that card details and all other sensitive data are protected. With the PCI DSS badge, you can be sure that the gateway follows industry security standards and provides data encryption.
How Much Does It Cost?
Mobile payment gateways charge fees per transaction. Usually, the fees are somewhere around 2.9% + $0.30 (PayPal, Stripe, Amazon Pay). Some payment gateways might charge higher fees. Additionally, payment gateways might also require monthly fees, as well as setup fees.
Is Your Mobile Payment Gateway Scalable and Customizable?
At some point in time, you expect your business to grow, so it is crucial to think ahead when it comes to mobile application payment gateway integration. Make sure your mobile payment gateway provider offers enough customization opportunities before you integrate recurring payments into your mobile app.
Also, if you plan to offer subscriptions to your customers, it is important to know the basics of subscription billing and make sure you choose a payment gateway that can handle this type of transaction.
What Features and Plugins Does It Have?
Features and plugins are essentially aimed at optimizing the payment experience. For example, card saving is a feature where a gateway automatically saves a customer’s card details to make purchases super easy and convenient. Another example is automatic OTP (one-time password) readout, where the payment gateway automatically reads the OTP from the customer’s mobile phone, eliminating the need for the customer to do this manually.
Top Three Best Mobile Payment Gateway Providers
We’ve picked the top three of the world’s leading mobile application payment gateways for you to choose from.
PayPal
This world-known payment service is easy to use and offers customers a high level of security and fraud prevention in more than 200 countries. PayPal records all transactions, so creating and monitoring invoices is less stressful for your business. What’s more, loyal customers who purchase online through PayPal receive special discounts.
Pricing
There are different fees depending on whether you are a customer or a merchant.
- Sending domestic personal transactions for a customer – no fee (if the payment method is PayPal balance or bank account), 2.90% + fixed fee (if the payment method is a card).
- International personal transactions – 5.00% (PayPal or a bank account), 5.00% + 2.90% + fixed fee (a card).
- Invoicing for a merchant is 3.49% + a fixed fee.
Authorize.Net
It’s one of the oldest payment gateway providers around. Today it serves over 430,000 merchants in the USA, Canada, the UK, Europe, and Australia and manages over one billion transactions every year. Authorize.Net has partnerships with most merchant account providers, which allows its users to accept payments from major credit cards, debit cards, digital payments, e-checks, and foreign payments.
Pricing
- Monthly gateway fee of $25.
- If you don’t have a merchant account, there is $49 for registration.
- 2.9% plus $0.30 per transaction.
Stripe
Stripe allows users in 46 countries to process and manage online payments offering many of the features one would expect from a global payment gateway provider, such as support for over 135 currencies and payment types, mobile payments, one-click checkout, subscription billing, and user dashboard with robust transaction tracking and reporting.
Pricing
- 2.9% plus $0.30 per successful card charge online. It costs the same no matter what type of card you process.
- For in-person card processing, Stripe charges 2.7% plus $0.05 per successful credit card transaction.
Fondy
Fondy`s in-app payment solution helps you boost sales channels with simplified one-click payments thanks to tokenization. Even better, you can tailor your in-app checkout flow with dynamic forms showing local currencies, languages, and relevant payment methods to your customers. That means you get access to over 300 payment methods, in 150 currencies, across 200 countries, all in the palm of your hand. What’s more, get complete visibility of your customer data and trends on your in-app Fondy dashboard.
Key features
- iOS, Android and React Native SDKs compatible
- Fully responsive with any mobile or tablet device
- Built-in security and GDPR compliance.
Pricing
- From 0.5% + £0.20p for UK-based businesses
- From 0.5% + €0.25 for EU-based businesses
What Is an Algorithm for Integrating a Payment Gateway into a Mobile App?
Specific details of adding a payment gateway will differ depending on the chosen platform, however, there are general steps to follow that we describe below.
Step 1: Integrating Server-Side and Client-Side SDKs
SDK (Software Development Kit) is a set of development tools that facilitate the creation of software products. In our case, SDKs are platform-related tools that allow a quick setup of secure online payments and guarantee safe data transfer. All the provider’s official sources give detailed guides to mobile SDK integration.
Step 2: Connecting to API
A payment gateway API connects your application’s checkout system to a payment-acquiring network. It takes care of the transactions between the seller and buyer and performs several tasks, such as encrypting cardholder data, authorizing payment requests, and confirming purchases. A payment gateway API serves to establish a smooth customer experience during online shopping.
Step 3: Applying for Certification
When you integrate a payment gateway through a special API, your server is directly involved in processing payment details. That’s why you are required to be a certified merchant and guarantee payment data protection. According to the PCI-DSS standard, you will have to prove your system security by filling out the Self-Assessment Questionnaire of level D.
Final Words
With today’s plethora of payment gateway providers, it’s easy to get lost and end up paying for unnecessary features or hidden fees. That’s why we recommend getting professional advice on this matter from software development companies like Itexus. This will save you time and money. Itexus has been in the FinTech space for years and can easily recommend a payment gateway provider that best fits an individual project and help you with the integration.