How To Build Your Custom Payment System

Why Custom Payment Systems

Most ready-made payment methods can easily connect to your online store. Yet, none will give you complete control over the payment process. Not to mention that you would want to make changes to your payments process: change something here, add something there. If you are a business that wants to run on its own rules and likes to have its freedom, a custom payment system is the right choice for you. When you build your own payment system from scratch, you can tailor it to meet your specific business needs. Custom systems have lesser restrictions, give you more control, and can be very efficient.

As a bonus, you can always choose to white-label your products and sell them to other companies. In simple terms, it opens up newer channels for you to grow your revenue and profit.

Customers trust websites that use their own payment systems. Build a secure payment system that inspires trust and supports multiple payments methods. This way, you will be able to improve consumer confidence in your brand.

Who Needs a Custom Payment System and What to Expect

Building your custom payment system is a long-term investment. It makes more sense if you are a large business with a high annual turnover. Custom payment systems can help when you do not wish to depend on a third-party provider or want to replace or upgrade your payment system. When you process a larger volume of transactions, say over a million per year, you could reap significant savings by using a custom payment system.

With a custom payment system, you can expect several benefits. These include:

1. Lower processing fees

Ready-made online payment methods come with their own costs, for instance, the registration fee. Besides, you are charged a fee for every operation, depending on the payments provider. Thus, a custom payments solution will help you cut down on payment processing costs. This saves you money in the long term.

2. Greater customization

As a large business, you might find existing, ready-made payment solutions limiting. They do not always come with every feature you desire and hence can be unsuitable for your business. Designing your own payment system allows you to get the exact product that you want. You can support whatever features that you want to offer your customers – from multi-currency, multi-mode payments to recurring payments.

3. More secure transactions

Your payments can be processed in a more secure environment when you use your custom payment gateway. By using advanced technology tools, you can ensure that the risk of fraud is minimal. Your custom payment system gives you more control over the safety of customers’ data and privacy.

4. New revenue channels

When you build your custom payment gateway, you can choose to sell it as a white-label product to other merchants. You can charge registration fees and transaction fees when other merchants use your product or service. Just ensure your product is highly secure and easy to customize.

A couple of things to note when you are considering building your own payment gateway.

1. Development time

Building your custom payment gateway takes more time than using a ready-made solution – from prepping to development to testing and maintenance. However, the long-term benefits outweigh the initial effort, as you will save on recurring charges and gain an extra source of income.

2. Compliance

You will need to comply with PCI norms when you build your custom payment gateway. This is a time-consuming and costly affair. But you can skip this by using a white-label solution that connects directly to the payment processor.

How to build a custom payment system?

When it comes to building your custom payment system, there are a few steps to follow:

1. Register as a payment gateway

You will have to register as a payment gateway provider with the credit card companies of your choice through your acquiring bank.

2. Set up contracts with your banks

You have to contract with the banks which will serve as payment processors for you. Each bank will have its fee structure – from handling transactions to international transfers. They would also have different rates for currency exchange.

3. Develop your APIs

You will need to build the right APIs for your gateway. This will help you to process payments without your customers having to leave your website. You can also ensure that your customers have the smoothest checkout without facing issues. Ensure you write robust documentation that complies with PCI DSS norms.

4. Choose additional payment methods

You will need to support digital payment methods, such as mobile wallets (Apple Pay, GPay), PayPal, Bitcoin, or mobile wallets (e.g., Apple Pay). These have to be added separately along with their APIs.

3. Tokenization of payment data

You will have to tokenize your customer payment data when you build a custom gateway. Tokenization reduces fraud by storing sensitive payment data in the form of tokens. This ensures customers’ payment data remains safe from third parties.

4. PCI DSS certification

When you build your custom gateway, you will need to be compliant with PCI DSS norms. You can achieve this by adopting the most compliant fraud management measures.

5. Develop management tools

You will need to build your own tools to manage your custom payment system. This could include a merchant web app or an admin panel through which you can manage all payments.

How can a payments partner help you to build the best custom gateway?

The right payments partner can guide you when you are building your custom payment system. They can offer you the counsel, expertise, and tools that will help you to develop a system that works best for your business.

The right payments partner will be able to support your vision by offering technology and platform-agnostic integration. From developing APIs to mobile integrations to maintenance and support, they should give you access to the right tools and talent. The right partner will help you develop bespoke solutions regardless of the technology your system is built upon.

Jose Augustine

Jose Augustine is the Chief Business Development Officer at Novalnet with extensive experience in European payment industry and a knowledge powerhouse.