Payment gateways can manage many intricate functions in a matter of seconds.
As more countries are preferring to go cashless, the preferred method of payment for most consumers is the use of both credit and debit cards. This option is fast, convenient, and more efficient than the use of cash.
Although e-commerce has been on the rise in recent years, m-commerce is following close behind. M-commerce simply involves online shopping through the use of a mobile device, such as a smartphone.
According to Business Insider Intelligence, consumers are growing more reliant on their digital devices and that means this has the potential of becoming consumers’ desired choice for online shopping in the next five years. BI Intelligence has forecasted that m-commerce could potentially hit $284 billion or comprising 45% of the total U.S. e-commerce market by 2020. Furthermore, the growth of m-commerce will produce a U.S. volume that is set to increase from $128.4 billion in 2019 to $418.9 billion through the year 2024.
In order to take advantage of this explosive market growth via m-commerce, you will need to integrate a payment gateway into your mobile app in order to allow your customers to make their payments both seamlessly and safely.
Why Do You Need A Payment Gateway?
A payment gateway both examines and sends transaction data. This also includes sending pertinent information to an issuing bank, like a credit or debit card number that is linked to a bank account. It also authorizes the movement of funds between the buyer and the seller.
Due to existing security restrictions, apps cannot link directly to financial institutions. However, the payment gateway is able to connect with both transaction and payment processors. They are often seen as a “mediator” between the two steps of the entire payment process. Payment gateways bring another critical advantage, and that is they assist in encrypting the payments, giving users safe transactions and the ability to process personal information.
If you are looking for a way to keep “third-party data” secure, but you also require a payment solution for your mobile app, having a payment gateway is the way to go.
How Do These App Payment Gateways Work?
The entire operation takes only a few seconds. Here is what happens:
- Consumers add products they want to purchase into the shopping cart. The cart is automatically linked to the payment gateway.
- When consumers enter their card details, the request is sent to the gateway.
- This request is then sent to the processor of an acquiring bank.
- Visa or Mastercard as well as the issuing bank validates the request. When the transaction is approved, the bank will then send the authorization code to the retailer.
- The consumer’s credit card is then debited for the sum of the purchase, and the merchant gets the money moved into their bank account in a couple of days.
Merchant Accounts To Choose From
While the gateway is busy processing payments, others are kept in merchants’ accounts. There are two types of merchant accounts available for m-commerce merchants.
- Dedicated Accounts: These types of accounts give merchants more control over the movement of their funds. Although they can be pricier and do make the payment processing lengthier.
- Aggregated Merchant Accounts: With this type of account, retailers are able to hold the funds of different owners. This is a more popular account as the procedure tends to be faster. The only issue with this account is that there are currently no regulations in the way the provider handles your money.
Top-Leading Payment Gateway Providers
As there are many popular payment gateway providers to choose from, do take the time to research each one thoroughly. Here are the leading payment gateway providers:
- Stripe: Simple to use and secure, Stripe offers a standard pricing policy of 2.9% plus 30¢ per card charge. As the total turnover of transactions go up, so do the savings and discounts.
- PayPal: This well-known provider is feature rich. Among the most popular is the ability to split purchase transactions, reporting tools, straightforward invoicing and payment procedures. PayPal’s fees include 2.9% plus 30¢ per transaction without any hidden fees.
- Amazon Payments: Retailers have the added advantage of not only the ubiquitous name, but the shipping details of Amazon customers stored in their accounts. Their fee is also the standard 2.9% + 30¢.
How To Integrate A Payment Gateway In A Mobile App
The key to choosing a reputable and trustworthy provider is to ensure that they meet PCI standards. Specifically, all financial transactions must be conducted according to the PCI DSS standards for protecting the sensitive financial data of the credit card owner. In order to meet these PCI standards, there has to be a secure network and it must be tested for functionality on a regular basis. In addition, encryption and access control elements must be set up within the security systems. This will keep everyone safe as well as protect your reputation.
When it comes to integrating a payment gateway into a mobile app, every service provider has produced software development kits (SDKs) as well as detailed documentation on moving forward with a mobile app integration with payment gateways that are available for developers.
This can be found on their official websites. It is within the SDKs that the libraries are processing all credit card details. These same kits allow the creation of forms, where customers can input their credit card information. Clear and straightforward guidelines are provided to decrease the learning curve.
As you look for the best payment gateway provider, make sure that it supports your current mobile app framework.
The Key Takeaways
M-commerce is taking the e-commerce industry by storm and there is no slowing this trend down. More consumers are opting to make their online purchases by using their mobile devices. The small screens are no longer deterrents as more people around the world are connected online via their smartphones.
As such, getting involved by creating your mobile app can only spell efficiency, convenience, and safety for consumers. The key is to ensure you choose a reputable and secure payment gateway and the right merchant account to verify and authorize transactions. Take time to seek the best payment gateway for your business as this will greatly determine your success.