It is impossible for a business to function online without some type of payment gateway and most online businesses depend on outside companies for their payment gateway software. But why? Why don’t more companies create their own payment gateways? There are actually a number of reasons to use a well-known payment gateway or other ready-to use payment options vs creating a payment system from scratch.
If you happen to have a team of programmers at your disposal, you may find yourself considering creating a payment gateway for your company. It may even seem like a fairly simply proposition. But there is more to payment gateways than just the programming aspect. A good payment gateway that establishes trust with customers and complies with legal constraints, as well as factoring in a number of other complexities that most people don’t necessarily think about.
More than a program
Establishing a payment gateway not just about information technology. There are also quite complicated financial, political, and legal aspects involved in accepting payments online. There are also a number of unforeseeable risks that you may not be entirely aware of.
One of the most important aspects of a payment gateway is the connection the company has with the various banks that are necessarily involved. Banks are typically slow to adopt new technologies when there are already so many payment options available. You may find yourself waiting years for banks to accept your payment software.
Even before you can think about getting banks on board, you need to contend with the government. The financial industry in the United States is strictly regulated, making compliance difficult, time-consuming, and sometimes expensive. Just payment Card Industry Data Security Standard compliance, more commonly known as PCI compliance, is often enough to thwart many gateways. The steps required to protect credit card data and minimize the potential for security breaches can also be hard to follow.
As if things weren’t complicated enough, in many industries you must establish relationships outside the U.S. in order to remain competitive, which adds further layers that must be considered. Not just the banks of those countries, but language barriers that must be overcome and foreign legal restrictions that must be understood.
Using an existing gateway
Just thinking about all those complexities is enough to give most people a headache, so using an existing white label payment gateway is far simpler. It could take years to create a payment gateway from the ground up, while an existing product can be in place in a matter of months, or less. This route is relatively inexpensive and you can have your gateway customized to fit your exact needs.
Many banks and other financial institutions also prefer for you to use existing software. Because they are already familiar with such options and many gateway provider have already established relationships with banks, saving you from having to develop your own relationships and connections.
White label payment gateways are also far less expensive than building your own because the costs are paid by many customers. Because those customers, like your own company, want a reliable solution, you can rest assured that any payment gateway you choose to do business with will be reliable and powerful.
Here to help
Implementing an established payment gateway gives you the opportunity to build your brand without having to manage your own payment processing, a particular advantage for businesses that are operating on a shoestring budget (which describes many new businesses). A managed gateway frees you up to focus on doing what you do, while you let your payments be managed by a company with experience doing just that.
Talk to our experts to find out how our solution can fill your needs more effectively than anything you might build on your own.
So how can established payment gateways be so much easier than building your own? Payment gateways are far more complicated than simply writing a program, there is a great deal of work in establishing relationships and complying with legal requirements, all of which are things that have been done for you when you choose a customizable payment solution that has already been developed.