Your Two Choices For Your Own Payment Gateway Solution

in Blog
on Monday, 17 August 2015 13:44

Payment service providers and merchants who need to process credit card transactions, ACH transactions and other forms of electronic payments -- whether from domestic or international sources -- can implement a payment gateway solution in one of two specific ways.

The first choice is a licensed gateway solution, which requires a significant investment and commitment. The second is a more affordable hosted choice. Let’s take a look at some of the advantages and disadvantages of each choice.

The Licensed Payment Gateway Solution

Merchants and PSPs can license a payment gateway solution in binary form -- meaning nothing about how the gateway works can be altered or improved -- or in source code -- a form in which enhancements can be made if needed. Licensing a commercial open source payment gateway and installing it in your own PCI-compliant environment is a popular choice.

Advantage of licensed solutions include:

- complete control of the gateway infrastructure

- no per-transaction costs

- built-in integration with the most popular banks and payment processors

- exclusive changes and enhancements can be made to the gateway for you, or if it’s an open source choice you can make changes yourself.

But there are disadvantages of a licensed gateway. These include:

- relatively high upfront costs for licensing

- the need for having a PCI-compliant environment in which to install the software

- significant ongoing costs related to hosting and maintenance.

In most cases, a licensed payment gateway solution is only recommended for enterprise-level merchants and larger PSPs that already have a compliant environment and process a high-volume of transactions.

The Hosted Payment Gateway Solution

Although it adds a third party into the equation, you may find choosing a hosted payment gateway solution a better choice for your company.

Among the advantages of choosing a hosted solution are:

- no licensing cost, only easy-to-handle monthly and transaction fees

- no need to own or rent a PCI-compliant environment

- no ongoing costs related to infrastructure maintenance

There are disadvantages, however. These include:

- no control over hosting environment quality or downtime

- the possibility of performance problems caused by high transaction volumes or other issues involving other merchants on the same system

- per-transaction fees are involved in most cases

Smaller merchants will almost always prefer to choose a hosted gateway because of the ease of startup and the low upfront costs. And some larger merchants may prefer to outsource payment processing with a hosted payment gateway as well.

Merchants and payment service providers who need a robust and sensible payment gateway solution for their size and type of business must consider all the advantages and disadvantages of both licensed and hosted payment gateways before making their decision.

If your company needs help making the right payment gateway choice, contacting PayVisors can be a smart idea. We’re an experienced business consulting company, and we have advice for you about payment gateway choices you may not have considered yet.

To find out how we can help you, contact us now. One of our expert advisor is waiting to help you as we have so many others. How may we at PayVisors be of service to you today?




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