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Why You Should Go For Your Own Payment Gateway

Why You Should Go For Your Own Payment Gateway?

Written by Pravin Vazirani Posted April 05, 2018 by Carolina

A payment gateway should allow you to accept payments quickly and easily. The key component of any payment gateway is to process transactions securely and keep your customer's money and data secure. A secured payment gateway helps you gain the trust of your customers so they are willing to make transactions. A custom payment gateway may require a greater initial investment in terms of time and money, but this custom solution will dramatically help in growing your business.

There are a vast array of payment gateways to choose from in today's market, each with their own benefits and drawbacks that affect the services you can offer through that payment gateway. Determining whether the pros outweigh the cons in every off-the-shelf product available can make finding the right payment gateway for your business an extremely time-consuming process.

Below, we discuss the pros and cons of creating a custom payment gateway, the key components of a payment gateway portal, common pitfalls, differentiating factors for your payment gateway in an already overcrowded market and what are the merchants looking for.

Pros & Cons of Creating Your Own Payment Gateway


  • Save on Payment Gateway Fees – Off-the-shelf payment gateways usually have a high sign-up cost and a fee associated with every transaction that is made, which over time eats up a large portion of your profit. With your own payment gateway, you save on these long-term fees and sign-up costs.

  • Custom Features – Even if you manage to find a good, reasonably priced off-the-shelf payment gateway that offers low transaction fees, you can still find yourself restricted by the limitations of that gateway. For example, a payment gateway owned by a third party may not support recurring payments and multi-currency transactions, which would limit your ability to process such transactions. With your own payment gateway, you can customize and add new features depending on your business needs and requirements.

  • Offer Payment Gateway Product to Other Merchants – You can offer and sell your payment gateway as a product to other merchants, ISOs, and Agents.


  • Payment Gateway Development & Maintenance Cost – There are several development and maintenance costs associated with building your own payment gateway. The initial cost of creating your own payment gateway is typically higher than paying the associated fees to use an external payment gateway; however, by opting to go with a custom platform you are also investing in a long-term product for your company that is optimized to meet your specific business needs.

  • Payment Processor Integration & Certification Cost – Integrating with payment processors is time-consuming and requires going through a lengthy certification process. Using an off-the-shelf payment gateway is often simpler and faster in this respect, as you essentially pay for the convenience of using an existing gateway.

  • Handle Settlement Reports From Processors – Payment processors send settlement reports in a raw format.

Key Components of Payment Gateway Portals

  • Integration with Multiple Processors – Integration to different payment processors provides multiple options for your merchants to choose from when selecting the acquiring bank they want to use to create a settlement account. This also helps you provide competitive transaction fee rates to your merchants, as different processors have different interchange fee rates depending on factors such as merchant's business and transaction volume.

graphic depicting payment gateway security
  • Security – PCI Compliance & Fraud Management – Every merchant looks for a secure payment gateway that will help them gain the customer's confidence. Merchants also look for fraud detection mechanisms built into payment gateways to avoid chargebacks and other issues that result from processing fraudulent purchases.

  • Scalability to Add New Features – The ideal payment gateway for any merchant should be able to adapt to the ever changing world of online payment processing. The upcoming surge and worldwide acceptance of new payment methods, such as the Bit Coin currency, is one example of why merchants must have a payment gateway that they can easily customize and update.

  • Disputes/Chargeback & Arbitration – Merchants will benefit from a payment gateway that has an interface to report and handle disputes from issuing banks.

Common Pitfalls of Payment Gateway Portals

  • Stuck With a Single Processor – A payment gateway integrated with a single processor will not be able to offer competitive fee rates to merchants. The payment gateway will also not be able to offer multiple options for creating settlement accounts between banks and merchants.

  • Manual Processing of Settlement Reports From Processor – The settlement reports coming from processors need to be manually parsed in order to be presented in a readable format, which can be a very time consuming and cumbersome job.

  • Not Supporting Recurring Payments – Most merchants do not want to store a customer's credit card information on their site and will prefer to look for a tokenized approach for accepting recurring payments from their customers.

  • Not Providing an Off-Site Payment Interface – Merchants tend to look for a "pay page" within a payment gateway to redirect their customers for processing ad hoc payments.

Differentiating Factors in an Over-Crowded Market

  • APIs For The Outside World – Building an easy and simple to use API to be used by merchant application.

graphic representing payment gateway api integrations
  • Enhanced Security (3D Secure Transactions) – Merchants always look for security measures added in the payment gateway that will reduce chargebacks.

  • Ability to Handle Disputes, Chargeback & Arbitration – Merchants need a good interface and reporting mechanism to view and manage their chargebacks.

  • Providing Off-Site Payment Interface – Merchants typically opt to have a "pay page" for their payment gateway to submit and process ad hoc payments.

  • Supporting Recurring Payments – Merchants do not want to store a customer's credit card details on their site and will often prefer to look for a tokenized approach for accepting recurring payments.

  • Customer Support – Merchants will seek round the clock customer support to make sure that their business is not negatively affected by glitches on the payment gateway side.

What Are Merchants Looking For in Payment Gateways?

Owning a payment gateway that is designed to your specifications can be a valuable tool for your business. It allows you to provide a single, integrated solution for point of sale (POS) and payment processing, which you can then offer to merchants as a replacement of the current payment gateway they may be using. However, to ensure that merchants are willing to part with their current provider, your payment gateway must be secure to reduce the risk of charge backs and have a wider range of options for choosing an acquiring bank for creating settlement accounts. It should also offer competitive fees, faster settlement, excellent customer support and high-quality reporting.

For more information on payment gateway and processing solutions, visit www.chetu.com/payments/gateways-processors.php


Chetu, Inc. does not affect the opinion of this article. Any mention of specific names for software, companies or individuals does not constitute an endorsement from either party unless otherwise specified. All case studies and blogs are written with the full cooperation, knowledge and participation of the individuals mentioned. This blog should not be construed as legal advice.

Chetu was incorporated in 2000 and is headquartered in Florida. We deliver World-Class Software Development Solutions serving entrepreneurs to Fortune 500 clients. Our services include process and systems design, package implementation, custom development, business intelligence and reporting, systems integration, as well as testing, maintenance and support. Chetu's expertise spans across the entire IT spectrum.

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