Best APIs to Integrate for Seamless Payment Processing

In today’s digital age where convenience and speed reign, the landscape of how people make payments has changed dramatically. Cash and checks are becoming a thing of the past as society embraces real-time payment processing API or digital payment systems. 
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API integration services are the connective tissue of a modern payment ecosystem because this technology helps businesses meet consumers' expectations, for a system that is reliable, fast, convenient, and secure. In a recent survey, 48% of all shoppers noted that at least 2 payment options are important for them when they make a transaction and reported that roughly 13% of shoppers abandoned their carts because a store does not provide enough payment options. 

In this blog post, you will learn about the fundamentals of Payment Gateway API integration in your store. We will also, therefore, share insights into the best payment gateway solutions that any online business should keep on their radar.

What is a Payment Gateway API integration?

A payment API integration services is essentially a digital register, or cashier, for your e-commerce store. It does exactly what its name suggests, it creates a secure infrastructure to process payment online by connecting the merchant's website or app to the customer's bank or credit card network.  

One of the most crucial integrations for e-commerce is the custom payment API development, as it enhances the checkout process in your shop by providing your customers with a range of secure, simple and convenient payment options. Let's see how this process looks behind the scenes.

How do payment API integration services work?

The process involved in a web app payment system integration is a structured flow of data exchange between the merchant's site and a financial institution (bank). In general, the sequence of events goes like this:

1. When customers go to checkout to pay for their cart, then they will enter their payment information, card info and payment amount.
2. As the transaction processes, the Payment Gateway API integration will receive an input of customer information and secure it.
3. The payment developer then sends it to the financial institutions thereafter to authorize the payment via their payment processor.
4. Once authorized, the institution consequently returns a response to the payment processor through the credit card network.
5. Then the payment processor connects to the payment gateway on the merchant's site. If the transaction was successful, the customer's order was placed and is being fulfilled. Then it transfers the funds to the merchant; it may take a few business days.

This is a general concept of web payment gateway setup operation. However, in general, depending on the payment gateway types, the transaction flow process looks different for end customers.

Types of Payment Gateways

Secure payment processing API is an important step in providing your users with a smooth and secure payment experience. Therefore, ultimately, choosing the type of payment gateway integration relies on several factors, like security, customer experience, and your business. Here are the most common types:

1. Hosted Payment Gateway: A hosted payment gateway requires customers to be redirected to a third-party payment page to complete the transaction. While it alleviates some PCI DSS compliance burden, it may create friction during the checkout process. Nevertheless, API integration for websites is a good option for a simple and secure solution for businesses.
2. Mobile SDK Integration: Mobile SDK integration permits secure in-app payments made with SDKs while still maintaining an integrated experience (no redirecting the user to an external browser). Moreover, while continuing to comply with PCI DSS, it provides a smoother checkout for mobile users and it is a must for companies with a mobile-first customer base.
3. API-Based (Direct) Integration: An API-based integration allows payments to be handled directly on the merchant's full website or app via a payment gateway setup for business website. Although direct integration provides full control, it also requires strict security design measures and PCI DSS compliance. This integration is recommended for clients wanting a fully branded payments flow.
4. Embedded (Iframe) Payment Gateway: This embedded payment gateway is an iframe-based integration of a payment form into the website. The sensitive data remains on the provider's system while still creating a good user experience on the transaction's proprietary app. Embedded payment integration is a great balance between security and usability for online businesses.
5. Subscription & Recurring Billing Integration: Subscription gives subscription-type businesses billing subscriptions on autopilot. The subscription integration will manage billing cycles and custom payment API development.

Steps to Setup Secure Payment Processing API

Additionally, integrating a payment gateway into a mobile app ensures seamless transactions while maintaining security and compliance. Below is a structured guide to integrate payment API for ecommerce into Android and iOS applications.

Understand your business needs & payment preferences 

Start by defining business goals and selecting a real-time payment processing API while supporting diverse payment methods, currencies, and regional preferences to enhance customer experience and transaction success.

Key Takeaways 

• Define your business model: E-commerce, subscription, or marketplace.
• It supports multiple payment methods, such as credit/debit cards, digital wallets, BNPL, and bank transfers in a centralized system through a payment orchestration platform.
• Enable global transactions: Multi-currency and regional payment options.

Select a Payment Gateway Provider 

When choosing a payment gateway API integration, assess fees, setup costs, payout cycles, and security standards. Global options like Stripe and PayPal offer wide reach, while Razorpay or PayU suit regional needs. Prioritize low FX rates and local acquiring for cost efficiency.

Key Takeaways 

• Compare transaction fees, payout cycles, and security compliance.
• Choose a provider with regional coverage based on business needs.
• Optimize costs by selecting gateways with low FX conversion rates.

Establish Legal Compliance & Bank Account

To integrate a payment gateway, companies must be legally registered, have tax identification numbers, and comply with all financial regulations. KYC is a requirement. Entering into an engagement with a fintech consulting company can simplify the onboarding of an API integration for websites whereby the requirements of setting up merchant banking accounts, integrating into your banking, and compliant setup are streamlined. 

Key Takeaways

• Register your business and secure Tax Identification Numbers (TIN, GST/VAT), respectively.
• Set up a business bank account to enable the settlement of funds. 
• Fulfill the KYC requirements with the appropriate documentation. 

Implement Secure Payment Gateway Integration

Integrate the Programmers Development Kit (SDK) or REST APi to your application—either by Gradle for Android or CocoaPods/Swift Package Manager for IOS. Integrate secure payment communications over HTTPS, and with authentication and webhooks in real-time. Professional integration allows for a greater check out experience, improved conversions, compliance to operating regulations, and increases the security of payments. 

Key Takeaways

• Integration of SDK or Rest APi based integrations will depend on the platform (Android, IOS, Web).
• Secure payments through HTTPS protocols, and tokenization and authentication process.
• Optimize checkout through one-click payments and embedded forms.

Test the Payment Integration

Investigate the payment gateway setup for the business website sandbox mode to test for transactions, failed payments, and network issues. Ensure the webhooks and the UI work properly across devices. For stability, performance, and smooth payment flow, consider load and regression testing after an update or period of multiple transactions.

Key Takeaways

• Test transactions in sandbox mode before going live to prevent issues.
• Simulate multiple scenarios for testing including success, failure, expired cards and network issues.
• Test load and regression to ensure the system is stable.

Deploy & Monitor Transactions

After testing has been completed, flip the payment gateway live with the live API keys. Track and analyze the transactions, success rates, and failures via dashboards. Use analytics and fraud detection alerts. Make sure to regularly update SDKs and security patches to maintain compliance and protections of data.

Key Takeaways

• Deploy the payment gateway live with the live API keys after all successful testing.
• Track payment analytics and fraud detection alerts.
• Regularly monitor and update security patches to maintain compliance.

Streamline Payment Functions & Growth

In order to improve the efficiency and profitability of your web payment gateway setup process, companies should track payment analytics, optimize the checkout process through A/B testing, and negotiate the lowest fees on payments. Implementing local or crypto payment options as well as enabling automated retries enhances cost savings, secures the most revenue from recoverable transactions and improves customer retention. 

Key Takeaways 

• Track transaction analytics and optimize success rates.
• Reduce cost through local payment gateway conversion and fee negotiation.
• Grow with region specific and emergent payment options.

Streamline Payment Functions & Growth

In order to improve the efficiency and profitability of your web payment gateway setup process, companies should track payment analytics, optimize the checkout process through A/B testing, and negotiate the lowest fees on payments. Implementing local or crypto payment options as well as enabling automated retries enhances cost savings, secures the most revenue from recoverable transactions and improves customer retention. 

Key Takeaways 

• Track transaction analytics and optimize success rates.
• Reduce cost through local payment gateway conversion and fee negotiation.
• Grow with region specific and emergent payment options

Best Payment Gateways For Ecommerce Stores

Use Cases of Integrated Payment Gateway API

Payment gateway APIs have many instances of functionality, including integrate payment API for ecommerce, checkout and subscription services, enabling payments for online marketplaces, and validating payment for Noble web studio.  Payment gateways allow apps to create a seamless branded user experience, along with the ability to integrate payments with other business systems (such as CRMs and ERPs), automate recurring billing, and so on. 

E-commerce and marketplaces

• Seamless checkout: Customers check out, never leaving your site, with a branded immersive experience.
• Online marketplaces: Safely process payment between buyer and seller within your platform, with the payment gateway facilitating the exchange.

Subscription and recurring payments

• Automated billing: Automate payments for subscription-based businesses such as software-as-a-service (SaaS) platforms or sites such as Patreon.
• Tokenization: Generate one-click payments for returning customers by securely storing payment information associated with a token.

Service providers and freelancers

Invoicing and collecting payment: Easily create and send invoices, while allowing the client to pay directly from the invoice, relieving the logistics of collecting payment.

App and software integration

• In-app payments: Build and embed payment processing greater functionality (like mobile or web applications), and continue to unlock a better experience.
• Custom integrations: Custom payment API development may be built for more advanced use cases such as payments for utility companies, etc.

Integration with business systems

• CRM/ERP solution: Link payment gateways with your Customer Relationship Management (CRM) and Enterprise Resource planning (ERP) solutions to automate inventory management, payment processing, invoicing, and transaction recording.
• Data aggregation:  Aggregate customer data and payment data into one view so you may have a complete view of sales performance and customer activity. 

Improved customer experience

• Branding: You can change the feel of the payment process to mind the style of your brand. 
• Dynamic pricing: You can implement dynamic pricing, coupons, and partial payment, which is difficult with hosted platforms and payment options.

Final Thought

The payment Gateway API integration landscape evolves rapidly, with providers offering increasingly sophisticated capabilities to meet the diverse & evolving needs of present-day businesses. As businesses adopt these critical elements of financial infrastructure, there is an increasingly great need to effectively test and manage these systems to ensure security, reliability, and performance.

MSM Coretech’s specialized payment API testing & management tools help development teams with all the components needed to successfully implement these complex payment APIs. From security validation to performance testing to documentation & collaboration, we manage the whole payment API integration services lifecycle.

The Author

Dhananjay Singh Rathore

Dhananjay is someone with a deep fascination for technology. He loves all tech ranging things from gadgets to applications that make life easier. Apart from the tech world, he derives happiness from translating his knowledge into words that can make almost everyone technologically literate. When not composing any tech-related or other forms of writing, you can find him capturing the beautiful moments of the day in a camera, spending hours binge-watching, and hanging out with dear ones.