Payment Gateway Development Services

A payment gateway service is a technology that enables businesses to securely process payment processing for digital and physical sales. It connects merchants, banks, and payment gateway services providers to support multiple payment options, including cards and digital wallets. A payment gateway allows businesses to start accepting customer payments online and offline, manage recurring payments, and handle in store payments. In simple terms, it’s how a payment gateway works: it encrypts transaction data, authorizes payments, and ensures funds are transferred securely.

1. Hosted Payment Gateways

In this setup, your website directs the customer to the platform of only the payment processor (like PayPal or Stripe) to complete the transaction. These payment gateway services handle the entire checkout experience off-site. Once the payment is confirmed, the customer is redirected back to your site. This is one of the simplest payment gateway solutions for small businesses because the provider manages all payment gateway operations.

2. Self-Hosted Payment Gateways

Also known as “on-site” gateways, these collect payment information directly on your website but send the data to the gateway’s URL in the background for payment processing. These are popular payment options for merchants who want to maintain their brand identity while accepting customer payments. While the merchant handles the front-end, the backend payment gateway works by securely transmitting data to the processor without a redirect.

3. API-Hosted Payment Gateways

This is the gold standard for large e-Commerce brands and those using custom payment processing software. Customers enter their credit card information directly on your checkout page, and the data is processed via an API (Application Programming Interface) or HTTPS queries. This setup offers the most flexibility for managing recurring payments and complex billing cycles, giving you total control over the user interface.

4. Local Bank Integration

This is a “Direct Bank Transfer” model, often used alongside traditional in store payments or regional online markets. When a customer chooses this comprehensive solution, they are redirected to their own bank’s website to authorize the payment via their online banking credentials. It is a highly trusted method for accepting customer payments in specific global regions where credit card penetration is lower.

Yes, but it requires serious investment. Custom payment gateway development involves end-to-end payment processing software development, including architecture design, integrations, and security layers. The payment gateway development cost depends on compliance needs, especially PCI DSS compliance, and features like fraud detection (card not present fraud, account takeover, identity the. Businesses often integrate with popular business software tools (CRM, ERP, accounting) and work with a trusted partner who provides a dedicated project manager in order to make custom payment gateway solutions work as required. The result is custom solutions tailored to specific business and regulatory requirements.

In 2026, Stripe is the leading payment service provider for developers due to its API-first design and industry-standard documentation. It provides highly flexible payment gateway solutions that allow for the seamless scaling of custom payment processing software. While Stripe is the gold standard for ease of use, it typically charges transaction fees of 2.9% + $0.30 for domestic cards.

Other top payment gateway providers include Braintree, which is ideal for projects requiring deep PayPal integration, and Adyen, which excels in bridging online and in store payments. Ultimately, these payment processing solutions empower developers to manage complex global transactions with minimal technical friction.