Credit / Debit Payment without Payment Gateway

Question

I am developing a shopping app. But, for Credit/Debit card payment, I don't want to use Payment Gateway such as Stripe & Authorize.net. Is it possible to make payment without gateways. Or is it necessary to use a gateway?

Answer 1

A Payment Gateway is usually a proxy to a Payment Processor, which works directly with an acquiring bank to access the card networks. Payment gateways typically offer value added services compared to processors, such as recurring payments, support, etc.

Going directly to a processor is certainly possible if you don't need these features, although the integration can be a bit more challenging. For example, if they only provide terminal capture, you would need to close and submit transaction batches yourself on a daily basis. Failure to do so could result in higher interchange fees.

Nowadays, the cost of integrating with an advanced payment gateway (with pass-through pricing, unlike Stripe) vs a processor is almost comparable, and processors even start to provide gateway-like APIs. First Data for instance has e4 (gateway API) and Compass (processor API).

Answer 2

Payment gateway is a piece of software providing a direct communication between a cardholder, a merchant, and an acquiring bank. Its common functions include but are not limited to:

Data encryption. Authorization request sending. Purchase confirmation. Address verification. Risk scoring. Fraud management. Geolocation estimation.

Speaking practically, you could go without a payment gateway, but it may result in too much work falling on your shoulders. In the world of payments, security is key, and you need to choose a reliable, PCI DSS compliant payment gateway to protect your transaction data & your customers money.

That said, for accepting online payments you need a payment gateway. Hope I was helpful!