How to integrate Payment Gateway into your website?

Last Updated at: Nov 08, 2019
How to integrate Payment Gateway into your website?

Nowadays, people prefer to buy products and avail services online without having to spend time and effort on physical trips to the shops. Also, many businesses and startups have started offering services on the digital platform.  

Websites, especially ones that trade in products or services which may be bought online, need an online payment facility to allow customers to complete transactions successfully. So how do you go about choosing a suitable gateway and integrating it to your website? Here’s a look at everything you need to know about adding a payment gateway to your website.

What is a Payment Gateway? 

A payment gateway is an external service provider which connects or links a webpage to a bank. It allows customers to purchase items from the website without having to leave the comforts of their room. Such a system can be utilized by everyone from e-commerce websites to charity or non-profit organisations that seek donations. There are several internationally acclaimed payment portals which facilitate such transactions, including PayPal, Stripe, Google Checkout and MasterCard. 

How do Payment Gateways work?

Payment gateways authorize and approve transactions without the need for any physical contact. The portal is heavily encrypted to provide a safe and secure environment to run the sale. All online payments which are done via a card, have their details encrypted so that no one gets access to the information present on the card, or the information the user inputs in any of the required fields. A lot of backend communication occurs for the approval and processing of the funds. These include:

  • Order confirmation 
  • Procurement of the card information.
  • Encryption of data
  • Information exchange to card dealers
  • Transaction evaluation
  • Approval/denial
  • Status updation
  • Merchant’s evaluation and subsequent approval
  • Payment debit notice to the card company
  • Payment credit to the bank
  • Bank’s confirmation

Documents required 
Prior to adding a gateway, the company or website must first file an application for doing so. But before applying, they need to incorporate the business as a commercial entity. As most e-commerce businesses have multiple equity partners, it is found to be more beneficial for the company if it registers itself as a Private Limited Company. In case the initial capital investment was less than INR 40 lakhs, and the founders have no intention of adding equity partners to the business, then they can incorporate the business as a Limited Liability Partnership. The fact that both these options provide liability protection and the added benefit of transferability is what makes most e-commerce businesses incorporate themselves as either a Private Limited or Limited Liability Partnership.

Once the incorporation is complete, the founders will have with them:

  • The Certificate of Incorporation
  • Memorandum of Association for the company 
  •  Articles of Association of the company
  • License

In case the company is registered as an LLP, it will have the following two documents as well

  • Partnership Deed
  • PAN Card issued in the name of the Company 

The company must use the documents stated above to start a new bank account in the name of the business. Once the account becomes functional, the founders can begin applying for a payment portal, as it would be linked to their official bank account.

Selecting the right gateway

Now that the legal side of things has been taken care of, the next step is choosing the right payment gateway provider. Since there are so many options out there, choosing the provider that best suits your needs is no easy task. Factors such as extra fees, transaction charges and additional features offered must be taken into account before fixing on a provider. Some of the most popular gateway service providers in our country are CCAvenue, PayU, DirectPay and EBS.

After choosing a suitable service provider, an application form in the prescribed format and the necessary documents must be submitted to the provider before beginning the process of integration. This entire process could take up to one week for completion. Once the application has been approved, a couple of test gateways must be prepared and checked for compatibility. A separate Website Terms and Conditions Policy and Privacy Policy must also be drawn up for the portal by the company’s lawyer to comply with IT regulations. The e-commerce listing of the company with updated prices for products must also be made available online. Once the test gateways pass the analysis, the service provider may go live with the payment gateway and the business can start making transactions through it.

By 2022, online financial transactions are estimated to go over US$5,411,354. Therefore, it becomes imperative for websites to have their own payment portal if it is to utilise and leverage people’s love for online shopping. Use the steps given above to legally and securely integrate a payment portal to your website and reap the benefits in the form of increased sales and happy customers.

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