Payment gateway is defined as some kind of software used by online service providers to authorize and conduct online payment securely.




  1. What is the payment gateway? How does a payment gateway work?
  2. Who needs a custom payment gateway?
  3. Which features you must need to include in your own payment gateway?
  4. The security you must need
  5. How long does it take to build a payment gateway?
  6. How much cost does it take to build a payment gateway?
  7. Benefits of payment gateway
  8. Challenges face in payment gateway.
  9. Conclusion 



What is the payment gateway?


Nowadays, in the digital era, most businesses take their business online and enable customers to make payment online and securely.

The payment gateway is the software which is used by an online service provider or owner of an online store to authorize and collect payment online, fast and securely.

If you are selling product online or online service provider, then your business won’t be able to survive without online payment gateway.

Without a payment gateway, it is not possible for you to make payments online.

It is the system that is allowed to online credit/debit cards to authorize and payment processing with communication between banks.

You must need your own online payment gateway to run your business because the maximum number of your customers want to make their payment online without going anywhere.


How does a payment gateway work?

If your customer enters their credit/debit card information on your website to get product/service from you, how will the bank charge them?

A payment gateway makes this happen using some software and servers, which transmit their card information to acquiring banks and back with the bank’s response are collectively known as payment gateway.


  • Your customer start a digital purchase
  • Merchant transmits the cardholder details to the payment gateway
  • The payment gateway software encrypts the card details and transfers to the payment process
  • Payment process verifies the card details and transmits to the card network
  • Card network transfer card details to the issuing the bank
  • Depending on the payment amount an approved and declined message is sent to the payment network
  • If the payment approved, the payment is transmitted to the merchant account.

Who needs a payment gateway?


  • The large merchant with high turnover who are not depending on the third-party provider
  • Incumbent billing company who want to replace or update their software
  • Who needs more advanced payment processing system
  • IT services providers who sell their services online
  • E-commerce store
  • Banks who want to improve their front-end solution



Which features you must need to include in your own payment gateway?


Here are some features you must need to include in your own payment gateway:


  1. Modern or classic payment gateway


You need to decide which payment gateway you need either classic or modern. Classic payment gateway needs you to apply for a direct merchant account while modern payment allows you to use their services without becoming one.

Modern payment gateway easy to set-up, but it has higher fees and sends your customer to offsite to make payment. This reduces the conversation. PayPal is the example of the modern payment, while is the example of the classic payment.


  1. Multi-payment method


You need to consider the multi-payment method in your payment gateway like credit card process, internet banking, PayPal transaction, etc. in your single integration.

This enables the customer to make flexible payment which increases your business.


  1. Multi-language and multi-currency option

 Suppose your business or online service is in out of your country. In that case, you must need the multi-language and multi-currency option to enable your customer to choose their native language to purchase process and make payment in their country currency.


  1. Fraud management security system

 Fraud management system monitor on incoming and outgoing payments.

This system helps to detect a fraudulent transaction before its done.

If you are planning on handling the large volume of payment, you must need this system to keep your business safe.


  1. Responsive mobile interface

 If your website or application is run on mobile devices, you must need a mobile-responsive interface.

Your website/application running smoothly in mobile devices which increase your conversion and help to get more customers.


  1. Built-in analytics

 This features will allow you to generate reports and analyze your sales performance. This will help you to gain performance insights to improve your business.


  1. Direct payment

 Direct payment allows your customer to make payment directly from the link and email without leaving the web page. This will make payment easy and fast and also help to grow your business.


  1. Add more value in your payment gateway.

 This feature is generally more used in e-commerce websites. Using this feature, your customer can make payment via QR codes and more facilities for online hotel booking, electronic vouchers, etc.


  1. Security

 This is the most crucial feature you must include in your payment gateway. This is not only important for you, but it is also more important for your customers. Before selecting the payment gateway, you need to ensure that the platform provides excellent security.


  • Invoice option

 If you consider invoicing option with a secure payment gateway, this will be a blessing for your customers. This is helpful in the perfect payment process and also offer a convenient way of accepting payments.


Which security do you need to build payment gateway?

In the past few years, there are many cyber threats cases in front of the world, especially in online payment. Nowadays, merchants look for the secure online payment to boost their confidence and customer confidence. Secure payment gateway with a fraud detection system can help in chargebacks and other cyber-related problems.


What is PCI DSS?

Businesses which handle the cardholder’s information must execute with the Payment Card Industry Data Security

Standard or PCI DSS.

PCI DSS is defined by a list of practices that lots of businesses use to improve card transaction security and defend the cardholder’s information from the theft. A security disruption is not just about losing customer’s information, but the business also suffers from a loss of customer confidence, sales, and legal actions.


Which PCI DSS compliance level you need?

Generally, there are four levels of PCI DSS compliance. You need to decide which one you need for your payment gateway.


  • Collection: Where cardholders’ details will be collected either on the customer’s browser or on a merchant server or on the payment gateway server?
  • Storage: where cardholder’s data will be stored either on the merchant server on the payment gateway server?
  • Transmission: how does the card data will be transmitted to the payment gateway?
  • Processing: how cardholder’s data will be processed by the merchant or payment gateway?


The following technologies you can include in your payment gateway to securing your payment transaction and protect against cyberattacks.



EMV (EuroPay, Mastercard, Visacard) is the global standard for credit/debit payments which is based on chip card technology. Every chip card transaction has dozens of information exchange between card, the POS terminal, and the acquiring banks. EMV does not replace the PCI compliance, but it was created to defend against the fraudulent use of credit cards. If you won’t accept the card transaction, you must prove that you have a backing to handle EMV transactions.


EMV 3-D Secure

This is generally used in e-commerce and m-commerce purchase which is allow the consumer to authenticate themselves when making card-no-present (CNP). This protocol provides a better security layer, which helps prevent unauthorized CNP transactions and protect merchants from fraud. The 3DS is the combination of merchant domain, issuer domain and interoperability domain.



Tokenization is defending sensitive information by replacing it with a token used to prevent credit/debit card fraud. In tokenization, the primary account number is the replace with the token which is passed through the various network needed to process the payment. The basic card information will never be exposed because it is held in a secure taken vault.



P2PE is the peer-to-peer encryption which creates secure communication between the device and protects transmitted data from exposure. It is used as a compliance solution for PCI DSS.



How long does it take to build your own payment gateway?

It may take years to build a payment gateway from scratch. But the solution is to licence the white label product which is running in just a few months. There are many white label products available in the market which can be customized based on your company’s requirement.

If you want to build your own MVP payment gateway from scratch, it takes approximately up to six months depending upon your requirement.



How much cost does it take to build your own payment gateway?

The cost of the development of payment gateway depends on various factors like features, using the platform, programming language, team of developers, developer’s location, working hour rate.

The estimated cost to build your own payment gateway is approximate $150000-$300000.

If you want to add some advance feature with the basic features than the development cost increasing than your expectation.



Benefits of having own payment gateway


  • No vendor lock-in
  • Custom-tailored features
  • Smoothly user experience
  • Data sovereignty
  • Long term cost saving
  • Side business
  • No fees
  • White label services
  • Full control over data



Challenges faced


  • Development cost
  • Maintenance cost
  • Security
  • Longer onboarding
  • Slower market-time
  • Managing the settlement report

SEE MORE: Are you looking for a developer to make your own payment gateway? Let’s connect





Payment gateway system is the most important for your business if you have a large number of merchants and a high level of turnover. You can save lots of money from another third party platform which are charges for every transaction. If you are still interested in building your own payment gateway system, then hire a professional development company to build your payment gateway with advance features.


Krunal Dabhi, the Co-Founder, and CTO of AIS Group, Sharing an interview wherein he exclusively talks about his company, his role, and how he formulates various business operation strategies.