Internet shopping has become common, and online payments have grown from a nice perk to a must-have feature for modern customers. Today almost every merchant supports card payments in their web store. But the times require online sellers to go mobile. According to Statista, the volume of mobile payments is snowballing. It proves that accepting payments in the mobile app is an absolute necessity. In this post, we’ll dig deeper into the subject. We’ll consider some technical details, review top providers, and estimate how much it might cost you to add the gateway into an app.
What Is Payment Gateway For Mobile Apps?
A payment gateway is a mechanism that allows buyers to pay for purchases directly from the app and enables sellers to accept online payments. The main functions of such a gateway are receiving, encrypting, and transmitting transaction data. The gateway does it in a swift and safe way, being equally beneficial for both parties of online shopping. Several participants take part in the payment gateway operation, they are:
- The issuing bank
- International payment system
- The merchant bank
Each of them contributes to secure data processing and helps accomplish money transfer. The issuing bank checks whether there is enough money on the buyer’s balance. The payment system confirms or rejects the transaction. The acquiring bank credits the funds to the seller’s account.
The above actions take no more than two-three seconds. If everything goes smoothly, the purchase status changes to “paid.”
The payment gateway is mainly needed to enable payments by credit & debit cards. Yet, this is not the only payment method available. Major providers usually support more payment types such as e-wallets, bank transfers, and local pays. See the comprehensive list in our previous post.
Payment Gateway vs. Payment Processor
Before we move on, let’s understand these two concepts. Many people use them interchangeably; however, they are not the same. Both payment gateway and payment processor take part in transaction processing, but their functions are slightly different. A payment gateway is a kind of judge. It decides to approve or reject the transaction between the customer and the mobile app. A payment processor is an executor. It brings the verdict into action and processes the transaction if it is approved.
Here is a detailed description of how things go:
- The user enters their card number and the CVV code, which go to the payment gateway.
- The payment gateway sends the card data to the payment processor via secure channels.
- The payment processor transmits data to the international payment system, i.e., Visa or AmEx.
- The payment system communicates with the bank-acquirer and bank-issuer to run the needed checks and transfer money from buyer to seller.
Here comes the question: “Do I need to integrate a payment gateway or a payment processor into my store?” The answer is: “Both.” You need a complete set, so to speak. The good news, however, is that many payment providers offer the “all-inclusive package.” When partnering with them, you get the full-fledged mechanism to process an online payment, and there is no need to worry about the payment gateway vs. payment processor difference. Further, we will review such providers and learn how to integrate payment gateway in Android and iOS apps.
Top Payment Gateway Providers For eCommerce Apps
Today, the largest players in the online payment arena are PayPal, Stripe, and Braintree. All three companies work internationally and serve customers around the world. They provide SDKs for integration with mobile apps and offer a fully functional mechanism for processing online transactions. Below is a brief comparison of Stipe vs. PayPal vs. Braintree. It shows available cards and payment methods, as well as fees you are going to face.
What Is An Algorithm Of Adding Payment Gateway In Mobile App?
iOS and Android payment gateway integration is not a very complicated process, yet it requires technical background and coding skills. Your dev will need to understand the technical documentation, connect to the payment gateway’s API, and write the code following the chosen provider’s official guides. Specific details of adding a gateway will differ depending on the chosen platform. However, the general steps look as follows:
Step 1. Integrate Server-Side And Client-Side SDKs.
SDK stands for Software Development Kit and means a set of development tools, utilities, and docs that help programmers create software using a specific technology. In the case of a payment gateway, SDKs are deployed to collect and process payment data from your app. These are platform-related tools that allow a quick setup of secure online payments and guarantee safe data transfer. You can find guides to mobile SDK integration on the official source of the chosen provider. I give the links to PayPal, Braintree, and Stripe SDKs.
Step 2. Connect To API.
A payment gateway API connects your app’s checkout system to a payment acquiring network. It handles transactions between the seller and buyer and performs several tasks: encrypts cardholder data, authorizes payment requests, confirms purchases. Payment gateway API establishes a smooth customer experience during online shopping. Find out more in official guides of PayPal, Braintree, and Stripe.
Step 3. Apply For Certification.
If you integrate a payment gateway through a special API, your server is directly involved in processing payment details. This fact requires you to be a certified merchant and guarantee payment data protection. According to the PCI-DSS standard, you will have to prove your system security by filling out the Self-Assessment Questionnaire of level D. Learn more about the PCI-DSS-compliant app in our previous post.
How Much Does Payment Gateway Integration Cost?
The price of mobile payment integration varies based on many things. The app’s nature and the features set are the primary factors. For example, you can opt for basic functionality, which means you can accept or deny payments. Besides, you may need extra features, such as modules for processing returns or means for storing card details, so buyers do not need to enter them during their next purchases.
The quality and price of work also depend on the dev’s skills and location. Today, many Western European and American customers prefer to outsource software development in Eastern Europe. Local developers have proved to be true professionals who deliver high-quality products at an affordable price. It is worth mentioning that SkillValue 2019 report highlighted five countries with the most capable developers, four of which are located in Eastern Europe.
If you partner with a reliable development team, they will provide an excellent service to build a mobile app that accepts payments. You will receive a detailed estimate before the work starts. The PM will be informing you about the progress through regular meetings and reports. Also, you can count on on-going project support and maintenance. If that’s what may serve you well, consider spending around $3,000+ for payment gateway integration in Android and iOS.
Need a more precise sum? Contact our managers. They will give expert advice and provide a detailed estimate based on your project specifics.