Development of your own payment gateway solution is a challenging task. However, it brings you independence and savings. That is, if you build a payment gateway solution yourself, you do not have to pay gateway fees, and you are free to customize it as required. Technically, there are only two basic functions a payment gateway fulfills. It guarantees the security of payment data and changes its format as it is sent from one entity to another. However, in order to be able to perform these functions, you need to take a lot of critical steps. These include establishment of acquiring partnerships and implementation of several important features. These features concern merchant and consumer fraud protection, PCI compliance, integrations with and certifications by your target channel partners, building of secure payment processing and merchant funding mechanisms.
Vital features your own payment gateway should have
Acquirer and processor partnerships concern the business aspect of the task (i.e. how gateway and merchant services are going to be provided). At the same time, the technical aspect calls for implementation of vitally important features, such as:
1. Necessary integrations and certifications
2. Unified application programming interface (API) for all payment methods
3. Fraud protection mechanisms
5. Management of recurring payments
6. User-friendly interface
7. Tech support
So, does it make sense to build your own payment gateway?
The answer is yes, if savings and benefits offset costs and risks.
The major benefits are:
1. Elimination or reduction of gateway fees
3. A chance to develop your own white label payment gateway offering
The major risks are:
1. High cost of gateway building and maintenance
2. The need for integration and certification works
3. Conflicts of data formats used by different channel partners
Average gateway fees range from 1 to 1.5% of transaction amounts, while development of a custom payment gateway solution costs about $150,000 or more. Although these estimates do not take long-term benefits, savings, costs, and risks into account, they can provide the basis for some rough reality check.
Does your own payment gateway have to be developed from scratch?
No. A white label solution, provided by some third party, is always an option.
An ordinary white label payment gateway is yours only in name. It bears your brand, but is actually controlled by the third-party provider.
A licensed white label solution with open source code is a different story. If you become a licensee of such a payment gateway technology, you can become its true owner. In this case you own a payment gateway that you did not build. Licensed open-source-code solution is already up and running; moreover, it includes all the basic features and integrations. The only major cost items you have to deal with are:
1. the license
2. future adjustments and their certification.
You are welcome to consult the payment specialists to learn more about a robust licensable payment gateway technology, called UniPay Gateway. It is a gateway that you can call your own without having to build it from scratch.