Payment is the most essential and deterministic arm of the on-demand startup marketplace as it is the smooth flow of money in this market through various channels that ensures and determines the extent of the success of the startup. With the multitudinous success of the e-commerce platforms and the subsequent increasing reliance and shift of the masses from the physical marketplace to the digital or e-commerce platforms, many entrepreneurs are diverting their resources towards the establishment of their own startups in which they are impelled to put hefty investments and stakes. Having put all their resources in it, the most intricate area of focus for them is the unhindered, secure, and smooth flow of money from the customer to the seller or merchant. Here comes the essence of a reliable payment gateway.
In this article we will enlighten you about what a payment gateway is, units involved in the process of payment, how it works, the essential intrinsic features of good payment gateways for OnDemand apps, and the top 5 payment gateways around the world.
What is a Payment Gateway?
A payment gateway as a merchant service is referred to as an extended channel integrating various units of the process of payment involving e-commerce or online shopping into a single, unified and stacked unit making the flow of money from the customer to the seller easier and convenient unlike the traditional arduous channels of payment. Different e-commerce sites and on-demand startups have different payment gateways deployed and integrated at their disposal to make sure that the flow of money is smooth and expeditious as there are multiple units and players involved in the process of payment. The most famous and reliant gateways are PayPal, MasterCard, and Stripe.
Units Involved in e-Payment
Deep down it is very complicated as it involves multiple key units or players and it is by the virtue of the payment gateways that all these units are stacked together making it easier for all. The key units involved in an e-payment are as follow:
Seller/ Merchant: Seller or merchant is the service provider that sells a particular product or provides a specific service to a customer. An on-demand startup in the marketplace is a seller.
Customer/ Client: A customer or client avails a certain service or buys a particular product by paying an amount for that service to the seller/merchant.
Issuing Bank: Issuing bank is the bank or the payment depository that tends to dispense money as credit or debit from the customer’s account on behalf of the card scheme e.g. MasterCard.
Acquirer: Acquirer is referred to as the financial unit or institution upholding the account of the seller where the credit is added to from the customer’s account in the issuing bank or depository.
How Does a Payment Gateway Work?
Three steps are involved in making an electronic transaction or e-payment through a payment gateway:
Encryption: The exchange of information and data between the user’s app or the platform he is using and the server of the retailer or merchant which in this case will be the on-demand seller is called encryption. Encryption is very important for initializing the process of e-payment as in it the requisite data from the issuing bank or depository of the customer is acquired.
Authorization Request: After encryption, an authorization request is processed to get approval from a credit company (Visa, MasterCard, Stripe, etc.) to make the transaction against the amount of the service or a product that the customer is buying or availing.
Fulfillment: When the authorization is granted, the transaction is made to transfer the amount from the issuing bank to the acquirer by the payment gateway.
Essential Features of Good Payment Gateways for OnDemand Apps
Every payment gateway comes with its unique and distinct features to bring greater ease and convenience to the OnDemand apps and their users yet some of them are indispensable to be incorporated in the app to be used and utilized by the OnDemand users and customers as payment is the most deterministic and key process in the e-commerce and online shopping. The essential features of good and reliable payment gateways for OnDemand apps are as follow:
Security
Extended and unbreathable security undoubtedly is the most essential element and feature of a payment gateway for OnDemand apps. Security is indispensable for both the customer and the service provider and without it, the payment gateway can be duly unreliable. While considering a payment gateway to integrate to your OnDemand app, you must make sure that the payment gateway you are going for must come with an unbreachable and robust security infrastructure fully complying with the international standards. It should have full compliance with PCI DSS Level 1. Payment gateways like MasterCard and Stripe provide you the most consolidated, stacked, and secure payment channels to make online transactions.
2. Easy to be Integrated
Another feature that is essential to a payment gateway is that it must be easy to be integrated by the apps and other platforms. It must come with plugins and switches that are easy to be integrated to any platform no matter to an app or an online e-commerce site. It must have harmony with the internal operating system of the app to which it is integrated.
3. Invoicing Options
It must have extended invoicing options to create invoices to have a documented record of the payments made with both the customer and the service provider. The invoice can serve as testimony and documented evidence for both the customer and retailer connected through the OnDemand App.
4. Detailed reporting and Record-Keeping
It must come with certain in-built statistical algorithms that can keep the record of the monthly or yearly transactions for both the customer and the retailer or service provider so that both of them can keep a clear track of all their transactions and can manage their budgets accordingly before making transactions in the future. It can help them make prudent and rational business-centric decisions.
5. Fast Payment Processing
It must have fast payment processing speed that is to say it should expeditiously make encryption, authorization request, authorization approval, and transaction fulfillment without being time-costly for both the customer and the retailer.
6. Split payments
To make the transactions lighter on the pocket of the customers, payment gateways must have the option of splitting hefty payments for the customers. Split payments can make it easier for the customers to pay a hefty amount to be paid in two payments simultaneously within a given period of time. Certain payment gateways like Braintree and Stripe come with split payment options for OnDemand apps and other e-commerce platforms.
7. Multiple Payment Options
Payment Gateways must have the feature of being able to make transactions through various payment options such as credit cards, debit cards, rewards, and wallets to give a greater breathing space of a preferred payment mode to the customer. It brings greater ease and convenience to the customer. Stripe and MasterCard provide multiple payment options to the customers using on-demand apps and other e-commerce platforms.
Top 3 Payment Gateways
A list of the top three payment gateways around the world for OnDemand apps and other e-commerce platforms is as follow:
1. PayPal
PayPal is the most rated and heavily used payment gateway around the world. PayPal lets you pay for your favorite things at millions of online stores in the U.S. and across 203 global markets—all without the hassle of converting currency. So it’s just as easy to know how much you’re spending as it is to spend it. It comes with extended security to protect all your financial information. It comes with certain features that let you pay from your wallet through a password and scancode to make your payments faster and easier without wasting any time.
2. Braintree
Braintree is a service actually owned by PayPal with innovative payments technology, scalable solutions, and legendary white-glove support backed by one of the world’s largest and most trusted fintech brands. No matter which features you choose, the advantages remain the same: Under PayPal, Braintree is one of the largest payment processors in the world, and it has the global expertise and enterprise knowledge to share.
Features
Fraud Tools
3D Secure
Data Security
PCI Compliance
Reporting
Payouts
Global Scale
In-store Payments
White-Glove Support
Third-Party Integrations
Stripe
Stripe brings together everything that’s required to build websites and apps that accept payments and send payouts globally. Stripe’s products power payments for online and in-person retailers, subscription businesses, software platforms and marketplaces, and everything in between. It has the following intrinsic features:
Stripe Features
Customer Interfaces
Multiple Payment Options
Multiple Versions
Use Cases
Revenue Optimisation
Fraud & disputes
Reconciliation
Payouts
Reporting & Insights
Business Operations
Third-Party Integrations & Support
OnDemand Startup integrates top-notch, internationally recognized and PCI DSS Level 1 compliant payment gateways to its OnDemand Apps. To learn more about our OnDemand apps you can get in touch with one of our consultants.