Is Building A Custom Payment Gateway Right For You?
Create a custom payment gateway or go for a pre-existing solution?
Let’s look at all the factors...
Fintech is radically changing the way people transact. It’s now possible to take and send payments anywhere in the world with a click of a button. We see this application in global and local business operations. This includes remote freelancing, e-commerce, B2B transactions, and many other forms and functions. Up to 64% of the world’s consumers have now used some form of financial technology.
At the center of all this innovation are payment solutions, a safe and reliable way to send and receive money from anyone in the world. When looking for a payment solution, companies often have two options: to use an existing service or create a custom one to their needs.
How does one decide whether to create a custom payment gateway or go for a pre-existing solution? First, let’s look at all the factors.
Pros and Cons of a Custom Payment Gateway
A lot of considerations go into selecting the best route for a payment gateway. For example, how much does it cost to build a payment gateway? What are the features I should look for? But first, we must know the pros and cons of using a custom-built payment gateway. Here are some of the most prevalent pros and cons of a custom payment solution.
Pros
- Customized features — Using canned payment gateway solutions limits you to whatever features and parameters the provider give. For instance, most payment facilitators don’t allow recurring payments for subscription models or fixed salary or retainer disbursements. A company can create a solution with this and many other custom features with a custom payment gateway.
- Lesser to no long-term costs — Fixed payment solutions often charge many fees, taking out a percentage from all transactions. In some cases, some payment providers will also give a lower currency exchange rate than the globally published one when transacting in multiple currencies. Companies can jump or cut these variable costs with custom payment gateways.
- Offer your payment gateway solution to others — After building a working solution, there’s a big chance that other companies might want access to the same features. Hence, companies can offer their payment solution to partners or potential clients too.
Cons
- High development costs — Building a custom payment gateway business model and solution can be costly initially. There are a lot of development costs, the most prevalent being the professional fees paid to developers.
- Dealing with certifications and legalities — There are a lot of policies put in place for fintech, and a good reason. Cybercrime is at an all-time high, including data phishing, identity theft, and many others. As a result, complying with the legalities attached to anti-money laundering, data privacy, and other factors could become a considerably taxing job, especially in the beginning stages.
- Building a relationship with partners — Fintech is a game of partnerships and collaborations with merchants, banks, and other financial and business institutions. It’s not impossible to work together with these sectors, but it will not be easy.
The conclusion
However, there are ways to bypass and simplify all the cons mentioned above. The best solution is to work with custom payment gateway partners who handle development, certifications, and merchant partnerships.
One great solution to check out would be Magnius, a white-label payment solution provider that offers payment solutions for banks, tech startups, and other organizations. It helps companies and people a fully functioning payment operation from scratch, giving a white-labeled solution with full customization.
Careers in Payment Solutions
If you’re a finance professional asking, “what can I do with a finance degree” or someone in technology, a career in payment solutions will seem promising. We’re barely scratching the surface of fintech. There are many other solutions to refine and create.
So consider learning how to build payment solutions from scratch and offering them to consumers worldwide.
Features that a Custom Payment Gateway Must Have
When creating a customized payment service provider, we should know our solution’s essential functions and features. Here’s a list of non-negotiable features when creating a custom payment gateway.
- Cloud-based access — A payment solution must be cloud-based so that anyone anywhere can access payment gateways.
- Data and information dashboard — Tracking financial movement is crucial in payment operations, so ensure that your solution has a dashboard that presents all analytics, transactions and financial information for ease of access to all data pertinent to transfers.
- Total security measures — Taking credit card information and all kinds of financial data can be hazardous. So ensure that the payment solution has all security measures in place to protect users’ finances.
- Multiple payment methods — At the very least, a payment solution must take bank transfers, credit cards, and mobile wallets. 81.3% of millennials now use mobile wallets. It’s even higher for Gen-Zers, with an 84.6% adoption rate.
- Multiple currencies — To design a payment gateway that keeps the global movement in mind, build one that supports multiple currencies.
- Recurring payments and subscriptions — This last feature isn’t non-negotiable per se, but it is a big plus. Learning how to build a payment gateway from scratch that supports recurring payments will be a game-changer as many canned payment solutions don’t provide this.