How to choose the right Mobile Payment System?

 How Do Mobile App Payments Work?

A mobile payment gateway is a front-end in-between service that authorizes and processes payments between a user’s payment portal (mobile device) and a vendor’s bank. It enables payments by credit and debit cards, e-wallets, bank transfers, and local payments.

 

Technically, a payment gateway is an application programming interface (API) that app developers integrate to enable an app to talk to a payment platform. It performs the encryption of cardholder data, authorization of payment requests, purchases confirmation, etc. Leading payment platforms provide APIs that work with a mobile app’ backend language. 

 

When a customer makes a purchase, their card information is sent to the payment gateway, which sends a request to the card-issuing bank. The bank checks whether there is enough money on the cardholder’s balance and sends the request to the payment system (MasterCard, VISA, etc.). The system confirms or rejects the transaction, while the data is also handled by a payment processor at which the vendor has a merchant account, although some processors have their own gateways.

 

If everything goes well, the bank confirms the transaction and then sends an authorization code to the payment gateway. The latter transfers the money to the vendor's bank account. Ideally, the complex process takes a few seconds.

A payment gateway passes the transaction data using security protocols and encryption to prevent fraudulent transactions. The SSL (Secure Sockets Layer) protocol helps encrypt the information to protect card details and other sensitive information. Most mobile payment providers don’t store raw cardholder information but encrypt or tokenize it.

 

Encryption makes the data unreadable for anyone without a secret decryption key. Tokenization substitutes sensitive information with a token, an algorithmically generated non-sensitive counterpart. Thus, the actual card data is never exposed during mobile app payment processing. Even if bad guys hack the system, they will obtain only a bunch of randomized devalued symbols. 

 

Additionally, most payment systems use HTTPS, IP address verification, and even request signatures. 

 

Mobile payments require that merchants and payment card processors should secure the users’ financial information and meet PCI compliance standards. If you intend to create a payment system from scratch, the PCI certification necessary for accepting mobile payments can be complicated and time-consuming. Instead, integrating one of the existing PCI-certified payment gateways into an application is the most efficient way to proceed.

How to Choose the Right Mobile Payment System?

Some of the best and most popular mobile payment gateways to integrate into your app include, but are not limited to:

If you wish to conduct the research and make the decision on your own, it’s essential to pay attention to the following:

 

Your business needs

Different mobile payment gateways support different payment methods and have distinct features geared towards specific business tasks.

 

For example, Braintree is one of the best choices for eCommerce platforms. Apple Pay facilitates easy and secure payments for goods, services, subscriptions, and donations. Stripe supports recurring billing, subscriptions, and special deals and coupons, and can integrate social media payments. It also supports Apple/Google Pay and can help organize proper monthly reporting on your financial practice. WePay reportedly doesn’t handle big transaction flows well but is praised for its security and offers fraud and risk protection as a service.

If you choose mobile payment processors that support multiple options and devices and cover all major credit cards and devices with popular digital wallets, you maximize your potential customer base. A service with rewards and loyalty programs for consumers can entice them to make mobile payments at your business. To develop a Mobile App check with  Mobile App Development Company in Bangalore.

 

Pay attention to the type of account offered. Aggregated and dedicated seller accounts are suitable for different business needs. An aggregated seller account provides a smooth route but comes with longer money transfers. If you need faster funds processing and greater control over finances, opt for a dedicated seller account, although it is costlier to purchase and implement.

 

The geographical location and preferences of your target audience

Make sure that your mobile payment gateway provider will work in your target locations. For example, PayPal works in over 200 countries, while Stripe is supported in 47 countries currently.

 

Find out your customer’s favorite payment methods. Remember that people appreciate multiple payment options in an app. Also, some payment gateways might be more popular in certain countries. For example, Americans prefer to pay using PayPal or credit/debit cards (which requires the integration of Braintree, Stripe, Authorize.Net, WorldPay, or a similar payment gateway for mobile apps).

 

If your business is global, make sure your payment gateway provider supports multi-currency payments and accepts major international debit/credit cards.

 

Security and certifications

Apple Pay and Google Pay may be safe, but they don’t reduce the burden of PCI compliance. Therefore, they need to be integrated with a PCI-compliant payment platform, such as Braintree or Stripe, and the card-issuing bank must be PCI-compliant.

 

Make sure that the mobile payments provider has SSL and PCI DSS badges. They show that the gateway follows industry security standards and provides data encryption. An anti-fraud system for protection from illegal actions is mandatory for successful mobile credit card payment integration.

 

If a provider is outside of the top lists, find out how long it has been on the market and whether any big companies have entrusted it with their mobile app payment processing. Negative feedback and poor ratings should raise red flags.

 

Speed and ease of use

It is essential to check how quickly a user can complete the payment process. A single payment is the most convenient option, which users ideally should complete in a few clicks. 

 

Small businesses also need to compare various mobile payment systems’ transfer speeds which can affect cash flow. The average time to deliver money to a bank account is three days. If you need funds fast, consider “instant” deposit processors. However, they are pricier, so weigh the pros and cons carefully.

The cost

All mobile payment gateways charge fees. AuthorizeNet, Braintree, PayPal, Stripe, and WePay charge around 2.9% + $0.30 per transaction, others slightly less or more. Per-transaction fees vary based on the location, card network, and payment method. A fee can be static or depend on the number of transactions. Providers may also require monthly gateway fees, like Authorize.net and PayPal Pro do, and setup, integration, currency conversion, and other fees. 

 

When the business’s size reaches a certain limit, paying for each transaction is no longer viable, and monthly subscription-based billing becomes preferable.

 

Watch out for “hidden” fees. Some companies require a monthly subscription for systems that house their payment processing app. Also, check whether there are separate fees for PCI compliance, fraud protection, or other essential security features. Also, look carefully at payment limitations. Providers can limit transaction sizes or the number of transactions per day, week, or month, affecting your sales. 

 

Scalability and customization

If your business is growing, think ahead regarding how your mobile payment gateway provider is going to meet your scaling needs. For instance, Square’s flexible tools easily adjust to the size of a business’s operations. 

 

Users like bespoke payment forms. Try to choose a service that provides interface customization abilities. If you want the design of the checkout process to match your app and website, use Stripe or Braintree.

 

The technicalities of payment gateway integration

The integration process should be straightforward and take minimum developer time. Payment processors normally provide SDKs (software development kits, development tools that facilitate the creation of software products) for mobile app integration. Pay attention to the SDK size: it should occupy minimum space on users’ mobile devices. Also, make sure that it supports your mobile app’s platform and framework and try to pick the one that offers multi-platform and multi-framework support.

 

Stripe provides a rich API library in multiple languages: Java, PHP, Python, Ruby, etc., and ensures smooth and effortless integration into the application. The system also offers well-designed checkout forms. However, as a downside, Stripe is not easily mastered. At least some basic knowledge of the web development languages is required to set it up properly.