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Payment Gateway Development: Working Process, Features, Revenue & Business Model

written by Admin | Apr 19, 2021

The present era is entirely revolving around the different mobile apps because currently, no person in the world can live life without using these smartphone applications. While using these advanced and technological apps, we are often worried about the security of our private details and money transactions.

Mobile apps are integrating different payment gateway scripts to provide security to user’s money and transactions to third parties. Mostly, e-commerce businesses are adopting money transfer scripts to facilitate customers through secure money transactions after shopping. Due to this, the total e-commerce sales globally is projected to hit USD 2.8 trillion. 

Seeing the market statistics, various entrepreneurs are taking interest in money transfer clone scripts. If you also own an e-commerce site or business and want to develop payment gateway scripts, then this article will be beneficial for you! Here we are going to describe the payment gateway development in brief including its working process and features along with the business & revenue model.

Let’s Get to Know About Payment Gateways

Payment gateways mostly work for e-commerce services that permit direct payments processing or credit card for online enterprises, or traditional brick and mortar sellers. It can be called virtually similar to the point-of-sale terminals at located stores. 

In layman’s words, a payment processor script operates as a service to transfer the information of direct payments or credit cards from a front-end doorway like a mobile app or website to the payment networks of banks for operating & authorization. It returns the transaction data and responses from the varied payment networks to the front-end.  

>>>Read More: How to Create Money Transfer App: BR Softech Development Guide<<<

Various payment gateways are used by eCommerce sites including CCAvenue, PayPal, Paytm, Amazon Payments, Payu, etc. These gateways make sure that money transfer is smooth and safe from one end to another. 

How Do Payment Gateways Work From Start to End?

A mobile app with the integration of a payment gateway script seems a reliable source to shop or do money transactions. The payment gateway starts to work when a consumer orders something from a merchant, where it operates multi-tasks to process the money transaction.                  

  • Firstly, users tap on the ‘buy’ or a similar option and enter the bank or card information on the website or app.
  • If the user is ordering through the e-commerce website, the web browser will encrypt the data that is sent to the webserver of the merchant. Otherwise, this phase will be completed by SSL (secure socket layer).
  • There is an SSL encrypted connection from the server-side of the merchant to the payment server provided by the payment gateway.
  • Then, the payment gateway transfers transaction data to the payment processor used by the bank or merchant. 
  • The payment processor sends transaction data to the card association, and it works as an issuing bank and gives a response directly to the payment gateway. 
  • The card association gets the request for authorization and verifies it. Then a response will be sent to the processor. It responds to the request’s acceptance or denial with the reason.
  • The payment processor sends this data to the payment gateway.
  • After that, the payment gateway sends it to the merchant website. It is called authorization and takes minimum time to process. The merchant will complete the order and the process will be repeated.
  • Lastly, a money transfer script will perform the procedure called settling. In this, it processes all the transactions simultaneously and sends them off to the issuing bank of the merchant together via the settlement processor. 
  • All your transactions are recorded by payment gateways and permits you to see them through payment gateway report facilities. It fulfils a single payment gateway procedure.   

>>>Read More: Top 8 Payment Gateways that Gain a Competitive Edge in 2021<<<

What Are the Majestic Features To Add in Custom Payment Gateway Script?

  • The multi-payment method processes internet banking, credit cards, cash payments, and PayPal Transactions with the sole integration.
  • The multi-language option permits users to fulfil the transactions easily in their familiar native language.
  • Multi-channel processing in payment processor clones accept payments smoothly on varied channels, be it on mobile devices, online, via call centre or mail-to-order.
  • Fraud management systems observe the coming payments and identify the fraudulent transactions to keep the business secure.
  • Built-in analytics create reports and detect the sales performance to get insights for business improvements. 
  • Responsive mobile interfaces offer a similar checkout experience on any device via a mobile-optimized payment page.
  • Multi-currency processing makes the customers able to make online payments in USD, INR or any other currency.
  • Value-added payment services provide additional functions to e-commerce sites from online hotel booking to payment via number or QR code.
  • The direct payment link collects payment directly from customers through the mail. 

>>>Read More : Payment Gateway Development: Cost, Features, and Challenges<<<

Business Model Used by Payment Gateways

If businesses are integrating payment gateway, then there must be a huge profit associated with it. Do you know what business model is followed by payment gateway scripts? Here are the potential business model options-

Payment Facilitation 

A payment facilitator is called a master merchant to process the transactions of debit and credit cards for sub-merchants into the payment app. These sub-merchants don’t have to go through the standard merchant account app procedure and can enrol to start taking customer payments. This instant onboarding can be a strong customer acquisition tool. 

>>>Read More: Why Do You Need A Payment Gateway for An Online Marketplace?<<<

Becoming a leading payment service provider will be a great benefit for businesses in terms of software provider classification and specifically SAAS business service providers

So, we can say that payment facilitation is good for established platforms including a sizable base whose payments provide more revenue than involved risks.

Payment Facilitate Management 

It is also called hybrid payment facilitation that offers various pros of true payment facilitation without a huge investment of money and time along with minimum financial risk. It also provides the benefits of client onboarding and also payment process ownership. Besides that, it provides a recurring revenue approach from payment fees taken from end-users. 

You can have a Managed PayFac model for a custom payment gateway script in the essence of a sub-PayFac. A true PayFac generates a platform to leverage the tools and work as a sub-PayFac. They have client’s insights and processing at a large level. It reduces the risk faced by master payment facilitators after platform approval to work as a managed PayFac.

Payment Partnership

In this option, you can become a payment facilitator along with being able to provide a fast account set up. There are also available third-party processors including slick APIs for merchant account onboarding by providing a hybrid combination between old re-selling merchant accounts for a merchant account provider that works as a payment facilitator. 

Some of the third-party processors offer 70% plus boarding instantly and have generated the payment facilitation experience. Further, the payments partner has a major role in compliance, support and risk management.

What is the Suitable Monetization Strategy OR Revenue model for Payment Gateway?

For having better knowledge about the monetization model of the payment gateway industry, below are some aspects that will help you-

Setup Fees

Payment gateway scripts charge fees for creating payment gateway accounts that differ from one gateway to another.

International Transaction’s Charges

Various payment gateways apply a higher TDR for multiple currencies involved in transactions. 

Support & Maintenance Costs

E-commerce businesses that create accounts with payment gateway scripts pay fees for annual maintenance and technical support costs.

Insta Pay

Some leading payment gateway scripts like PayU and Instamojo provide offline retailers with the facility of gathering payment through online or credit/debit cards that generate a link received by buyers over SMS or mail.

TDR (Transaction Discounting Rate)

Each transaction that is done via payment gateway scripts will be charged with the transaction processing fee called TDR. TDR is different as per the mode of payment transactions like internet banking, credit or debit card, digital wallets, etc. It is appropriate for higher volumes of transactions. 

Different Aspects To Look Out For Payment Gateway Script Development 

Hire the experienced and skilled payment processor script providers who have a brilliant plan in mind to provide you with the best payment gateway script-

  • Decide appropriately how your merchants, customers, and platform will interact? Will it be B2B, C2C, or B2C? What type of data will it collect? 
  • Describe the roles of who will host the checkout page, the payment gateway, the PSP, and the marketplace?
  • To have the scalability, predict the transaction’s number per hour, day and week including max peak load. 
  • Ask yourself, do you want to launch your payment gateway clone script early without adding a full-feature set or would you prefer an all set-up and advanced features set?
  • Bring out an adequate architecture that addresses the technique to deploy, observe, and safely. 
  • Have a strong grip on update versions and changing management. Would you let other businesses use your APIs? 

Why You Should Choose BR Softech Over Any Other Company?

BR Softech has specialization in providing secure payment gateway script development that stimulates the transactions to save the roll-out time and manage all the payments. We understand the future requirements of money transfer scripts, hence we make them accordingly.

At our company, we have expert and knowledgeable team members to build creative and innovative solutions for providing support and project-specific development that leads to high revenue-generating features. Come to us to get better services.   


I am the admin of BR Softech PVT LTD - an Award-winning App, Game & Blockchain development company. My thesis is to work with hard-bit and get the best Exposure. I have driven by the spirit of entrepreneurship and dream to build a billion-dollar-company.

About Us

BR Softech Pvt. Ltd. excels in providing cost-effective IT Solutions. Established in August 2010 with over 10+ years of rich experience. An Apex rated IT serving company around the world. Our team of innovative and creative designers deals in web designing, mobile/ software development and other digital marketing services intending to deliver outstanding digital outcomes.