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A payment gateway is a piece of software that acts as a mediator between cardholders, merchants and banks. It is designed to facilitate the processing of e-commerce transactions as well as authorize payments between merchants and customers. Authorize.net, PayPal, Stripe, Braintree are among the most popular representatives in their category.

Since the integration of a payment gateway is a rather complex process, many peculiarities have to be taken into account for informed decision-making.

How do payment gateways work?

The knowledge of the payment gateway anatomy is a must for moving forward on the topic.

The payment gateway mechanism comes into the play as soon as a customer will fill in the required field with their credit card credentials and press the purchase button.

First, the transactional data is received by the payment gateway and then is redirected to an issuing bank in an encrypted form. In turn, the issuing bank sends this payment request to a credit card network (Visa, MasterCard).

The main task of credit card networks is to identify whether the customer has enough money on their bank account to pay the transaction or not. If everything is alright, the request is verified and authorized to the merchant. After all, the required sum of money is charged from the customer and sent to the merchant account within a certain timeframe.

Things to consider before integrating a payment gateway

As I have already mentioned, there are certain peculiarities you need to know about for moving on with gateway integration. Let’s now consider them.

Merchant account

It is a type of bank account that is created by a business owner for accepting payments. The merchant account is generally obtained in banks and can be integrated with the payment gateway if the chosen bank permits this. However, some payment gateway providers, like PayPal and Stripe, offer their customers to open the merchant account within the system.

Merchant accounts are divided into:

  • Dedicated merchant accounts. This type of account provides for an opportunity to negotiate custom fees and speed up the transfers of money. But to set up a dedicated merchant account, you have to go through multiple checks and so it is only reasonable for businesses with a high turnover.
  • Aggregate merchant account. This implies that your merchant account is shared with other merchants. Imagine a bank cell that is divided into sections -- each of these sections stores money of a certain merchant. The aggregate account is easy to set up but it provides you with less control over finances.

Security certificates

Your product should comply with the Payment Card Industry Data Security Standard (PCI DSS) and be certified for dealing with sensitive cardholder data.

Picking the right payment gateway provider

Payment gateway providers typically have different tech capabilities and fee policies. So it is up to you and your objectives which one to choose. Let’s consider some popular service providers.


This payment gateway is supported in more than 200 countries and accepts payments in 25 various currencies. This system evolves all the time and offers its customers aggregate merchant accounts.

Fee: 2.9% + $0.30 per each transaction.


It is a subsidiary of the PayPal company. Braintree is supported in 40 countries and accepts payments in 130 different currencies. Among the main features of this payment gateway provider are:

  • Built-in fraud protection
  • Payouts within two days
  • Live customer support

This payment gateway comes with SDKs written in seven programming languages and allowing both Android and iOS developers integrate Braintree with their apps.

Fee: 2.9% + $0.30 per each transaction as soon as your revenue exceeds $50,000.


Stripe is another well-known payment gateway provider. It supports mobile and desktop checkout has built-in analytics and a plethora of other useful features like Stripe.js JavaScrip library that is crafted for secure exchange of sensitive information.

Stripe SDK is also written in seven programming languages what makes it easy to integrate this payment gateway with your mobile or web product.

Fee: 2.9% + $0.30 per each transaction.


This payment gateway provider is first of all known for its reasonable fee policy. Besides, Dwolla supports all of the popular operating systems by means of RESTful API and OAuth.

Fee: $0.25 per each transaction above or equal $10 and free for the rest


This payment gateway provider can offer its customers a dedicated merchant account along with built-in fraud detection feature, data management, PCI DSS compliance, etc.

Fee: $25 per month and 2.9% + $0.10-0.30 per each transaction.

Wrapping up

As you see, there are a plenty of peculiarities that should be considered before integrating a payment gateway in the app. The most important thing is to make sure that the functionality that a certain provider offers is enough for your application.

About the Author
Nataliia Kharchenko is a Technical Writer atCleveroad. It is a web and mobile app development company in Ukraine. We are focused on helping startups, small, and medium businesses create competitive and winning software. I enjoy bringing a digital world closer to people and writing about technology, mobile apps, innovations, and progressive management models. You can contact with Nataliia onLinkedin.Author’s email address: kharchenko.wr@gmail.com

The views, positions, and opinions expressed by the guest writer are those of the writer alone and do not reflect those of the iHub or any employee thereof. The accuracy and validity of the information supplied by the guest writer are not guaranteed by the iHub. The copyright of this content belongs to the author and any liability with regards to infringement or intellectual property rights remains with them.

Source: https://ihub.co.ke/blogs/33567/what-to-consider-before-integrating-a-payment-gateway-in-an-app

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