With the millennial population driving the disruption in online shopping, business mindsets are changing and rapidly shifting to upcoming mobile technologies to generate more sales and profits.
As a result, integrating the right payment gateway to your online store has become a vital conversion component that impacts the consumer buying cycle.

Given this scenario, what’s the right approach to choosing the best payment gateway for your online business?
You need to start with identifying your business needs, your geography of operation, your existing technology components and your larger business goals. Once these variables are identified, you can then choose the payment gateway which best suits your needs.
The infographic below will help you understand the parameters which need your attention before you integrate the payment gateway with your online store and will help you zero down on the gateway which would be a right fit for your business.

What is a Payment Gateway?
Consider a bidirectional virtual gate. This gate is a service capable of connecting your store to a payment processor or bank to accept your customer payments. In technical terms, this gateway validates your customer’s transaction credentials securely for web/mobile payments.

What are the types of Payment Gateways?
Broadly, there are two main types:

1. Hosted Payment Gateways:
A hosted payment gateway redirects the customer to the host network for transactions.

What is its benefit?
Integration is hassle-free and easier.
Stores do not have to worry much about ensuring transaction security to the customer. It is the responsibility of the host network to manage secure transactions and payment processing.
What are the challenges involved?
Major bottleneck of integrating this payment gateway type in your architecture is compromising on the control of the interface and interaction experience of the customer.
This is certainly not favorable for transactions through mobile. Hosted sites take higher loading times thus not favoring mobile phone payments.
2. Integrated Payment Gateways:
An integrated payment gateway makes an API call from your site. So the customer is not redirected to the host.

What is its benefit?
Their flexibility in terms of UI/UX control to the retailers and online businesses outweighs the former.
Faster API calls promote mobile friendliness.
What are the challenges involved?
While hosted gateways are maintained by the host payment gateway provider, integrated ones require ongoing security support and maintenance by the ecommerce development team.