SDK-enabled Payment Gateways – The Next Phase For API Banking & Financial Services
The proliferation of digital payments has transformed business operations by replacing traditional payment methods with faster, more convenient, and more secure transaction methods. This trend has become the new norm for facilitating transactions in various industries. In that mix, the payment gateway market is especially booming and is projected to grow exponentially in the coming years.
To retrace its history in the Indian context, we have had online banking and payment channels since 1996, and the e-commerce boom started in 2007 with the emergence of Flipkart. As for the market size, the Indian payment gateway market is expected to grow at a CAGR of 11.6 per cent from 2023 to 2028 to reach USD 2,897.6 million.
The ascent of e-commerce has propelled the adoption of simplified payment methods such as one-tap and one-click payments, rendering payment gateway integration a critical factor for businesses to retain their competitiveness in the rapidly-evolving digital landscape. However, not all payment gateways are dependable, and it is imperative for e-commerce websites to prioritize the deployment of secure and reliable payment gateways.
How Do Payment Gateways Work?
Payment gateways act as intermediaries between customers and merchants, fulfilling a crucial role in the payment process. Initially, payment gateways verify the availability of funds in the customer's digital wallet or other payment methods to complete the purchase. Subsequently, they employ a range of security measures, including encryption, firewalls, and fraud detection systems, to protect sensitive data processed within the system. Finally, payment gateways facilitate the payment process, ensuring a secure and seamless transaction experience for all parties involved.
Types Of Payment Gateways
There are various types of payment gateways in use, including hosted, self-hosted, and direct payment gateways. Self-hosted payment gateways gather payment information directly from the merchant's website, while API-hosted gateways enable customers to enter their payment information on the merchant's checkout page. Hosted payment gateways, such as PayPal, Paytm, Razorpay, and Cashfree, are well-known examples of payment gateways that offer hosting services. In contrast, direct payment gateways redirect customers to the bank's website to complete their payment transaction.
Selecting Secure Payment Gateway Integration
Businesses must exercise discretion in selecting a payment gateway integration that fits their budgetary constraints and provides a comprehensive suite of security features, payment options, and an intuitive user interface. Alongside these factors, integration capabilities with websites or applications assume a crucial role in the selection process of payment gateway integration for online transactions. In this regard, the significance of Software Development Kit (SDK) integration is paramount, as it streamlines the checkout process and enhances the overall payment experience for customers.
SDK-enabled Payment Gateways
SDK-enabled payment gateways provide businesses with enhanced ease and efficiency in processing payments. They offer a user-friendly and simplified payment processing experience that allows for easy integration without complex coding. Key features include real-time reporting, multiple payment modes, acceptance of various currencies, and streamlining of payment processes.
Additionally, enabling SDK integration permits businesses to customize the payment gateway to match their app or website's look and feel, resulting in a seamless user experience. Another benefit of SDK-enabled payment gateways is improved security measures that encrypt sensitive customer data to prevent unauthorized access.
The future of payments infrastructure involves enhancing both the development experience and the end-user experience, and this can be achieved through a high-quality SDK. In the payment gateway arm, Decentro’s SDKs offer a nuanced customer experience from KYC and onboarding to a payment gateway that simplifies payment processing, saves development time, and improves security while offering customizability and interoperability.
(Data source: IMARC)
