As the number and percentage of online payments is rapidly growing, companies need to review their approaches to online payment processing. If a company wants to become a payment service provider, it needs to establish relationships with merchants (future customers), payment gateways, and banks.
When it comes to relationship with a payment gateway services provider, a company must decide, which payment gateway solution it should implement in order to get the best value-for-money. The three options it can choose from are: hosted payment gateway solution, licensed payment gateway solution and in-house payment gateway solution. Each of the options, naturally, has its advantages and disadvantages.
For instance, while a self-built payment gateway solution allows the company to keep all the original “know-how” features in-house and avoid upfront costs and per-transaction fees, it requires specially-qualified payment gateway software development staff, and induces related development-associated costs. A licensed payment gateway solution makes it easy to estimate the overall cost, but often comes with a set of features, which do not correspond to the company’s operation mode, or are completely unnecessary. A hosted payment gateway solution requires per-transaction and upfront fees to be paid, so a company which processes large volumes of transaction might, at some point consider switching from a hosted solution to a licensed one, or even developing payment gateway software in-house.
An article “Hosted, Licensed and In-house Payment Gateway Solutions” describing hosted and licensed payment gateway solutions from a higher-level perspective, as well as an article, where all the pros and cons of hosted, licensed and in-house payment gateway solutions are analyzed in greater detail, can be found at Paylosophy.com web-site.