How To Develop A Payment Gateway: Your Complete Guide

We can hardly imagine our life without Internet shopping today. People are more opt to buy online nowadays therefore multiple businesses across the world do their best to stay in sync with their customers’ buying preferences. Raising demand for quick online purchases has resulted in gateway market expansion. According to the Acumen Research report, the market size is expected to reach USD 106.4 billion by 2030.

Typically, online payments seem simple to customers because transaction processing takes a few minutes. But have you ever thought about what happens in this short period between customers’ data entering and money charge-off?

How To Develop A Payment Gateway
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What happens after you click “pay now”

To cut a long story short, the payment gateway sends encrypted details to the acquiring bank, which then communicates with the customer’s card company and issuer. Then, the transaction is either approved or rejected. The information on approval or rejection is transferred back to the gateway that informs the customer and merchant about the payment status. The process is created in a way that does not allow fraudsters to steal sensitive data. Safety checks occur at different stages of the procedure.

Reasons to use a payment gateway

  • It reduces the risks of getting into a fraudster attack and guarantees data encryption;
  • This technology benefits all the parties involved in the network;
  • Every profitable business operates online platforms and applies online payment tools to ensure revenue growth and product promotion;
  • Both customers and merchants highly appreciate the convenience and flexibility of this cutting-edge solution;
  • The technology processes transactions immediately and automatically.

Off-the-shelf or custom payment gateway

Depending on the type of business and its turnover, one can resort either to the off-the-shelf payment gateway or to the customized one.

You have probably heard about  PayPal, Authorize.Net, Stripe, and other internet payment technologies that can boast multiple beneficial features for online purchases. They serve many businesses and customers across the world. Nevertheless, even the most advanced off-the-shelf payment gateways are not tailored to the specific needs of every particular business. When deciding on the type of network (custom or off-the-shelf), analyze your business needs, set your priorities, and answer the following questions:

  • Do you expect your customers to buy your product in various currencies, in installments, or make multi-party payments?
  • Would you like the process to be totally transparent?
  • Is your business large?
  • Are online purchases of your product growing?
  • Are you concerned about data security?
  • Do you appreciate the independence of third parties in the payment process?
  • Do you want to have a competitive advantage over market majors and draw in more buyers?

If you have at least one “yes”, you should consider developing your custom payment gateway.

Factors to look at before developing your payment gateway


  • It has custom features specifically adapted to your demands;
  • You will save money as fees for every transaction and sign-up are not charged compared to using off-the-shelf payment gateways;
  • Your business will earn more profit by charging other merchants fees for processing their payments through your network.


  • Building a new technology is expensive and time-robbing;
  • The certification process is also cost-intensive and time-consuming.

A guide to your payment gateway

To avoid material damage and time waste, make sure you have taken all crucial steps toward the system’s successful functioning:

  • You have the infrastructure for your future solution and the server to host it. The server can be either your own or that of a third party.
  • You have found a third-party vendor aka payment processor enabling smooth transaction flow. 
  • You have received  API documentation from the vendor and followed all the implementation instructions.
  • You have prepared an external API to ensure customers’ data transfer.
  • You have developed a customer relationship management system for organizing transactions and customer data into a database.
  • You have integrated an anti-fraud system. This is an essential feature for building customers’ trust in the context of the growing number of crimes associated with online payments. According to the estimates conducted by Juniper Research, the global online and eCommerce fraud losses amounted to $20 billion in 2021 and are expected to reach $206 billion by 2025. You bear responsibility for ensuring your customers’ data safety, so take all fraud-preventing and detecting measures. Consider tokenization as a tool for sensitive data protection.
  • You have certified your payment gateway and now follow strict security standards imposed on any business processing online payments. Compliance with the Payment Card Industry Data Security Standard or PCI DSS is a must for any payment gateway.
  • You have tested your payment solution and made sure it works smoothly and effectively.

As soon as you actualize each step, you can launch a brand-new payment gateway.


Multiple factors influence the effectiveness of your payment gateway. To minimize risks, you should carefully analyze the entire implementation process, objectively assess your financial opportunities, and forecast your further steps toward revenue growth. Creating your payment gateway can be challenging due to the high costs of its development and certification. Typically, the average price for building a payment gateway ranges between $150,000 – $250,000, excluding advanced features. Bear in mind that the development process can take from 2 weeks to 2 months.

Nevertheless, this solution is sure to help your business expand and earn profit in case you integrate all necessary technical and security features. A wisely organized process will compensate for your investments multiple times.


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