How To Create An Online Payment System?

5 Mins read

Create An Online Payment System. Even the thought of creating an online payment system can be overwhelming for many business owners. When you start looking for an ideal payment solution for your business, you’ll probably find many recognizable names in the form of online payment service providers such as Google Pay, Apple Pay, Stripe and PayPal, and many other online payment service providers that you’ve never heard of. To help you overcome the difficulties involved in creating a custom payment gateway, we’ve put together a simple and comprehensive guide to Online Payment Services, breaking down the basics of online payment solutions and providing you with all the necessary information required to create an online payment system.

Without further ado, let’s dive deep into the basics of creating an online payment system.

What Is An Online Payment System?

An online payment system acts as a bridge for transactions between two parties. Basically, it allows the buyers to send payments and sellers to accept payments over the internet. This process can be shown as follows.

Customers>>Online Store>>Payment Gateway>>Payment Processor>>Bank>>Merchant.

How Does An Online Payment System Works?

As told in the above passage, an online payment system facilitates payments for goods and services over the internet. This payment ecosystem is comprised of three elements which between them handles the entire transaction.

  • The Payment Gateway

A payment gateway is key element to the online payment solutions as it facilitates the processing of online transactions by transferring important financial data from an online payment portal and the concerned bank. Some of the major highlights of its functionality includes: checking the legitimacy and validity of cards used in payment online, determining the bank about payee’s card and encryption of all the vital financial information of cards associated with the transaction to ensure smooth processing of payments.

  • The Payment Processor

Payment processors are basically companies that provide payment processing services and operates to facilitate payments online between two parties. A payment processor manages the payment related information, such as credit card or debit card details from the buyer to seller’s bank account to facilitate financial transactions smoothly.

  • The Merchant Account

In order to provide online services, a merchant account is required. The merchant account is a special bank account wherein the funds from online sales are kept before they are transferred to a regular bank account. With this account, payment can be done and accepted through various transaction channels like a website or an e-commerce portals.

Who Needs A Custom Payment Systems?

The types of internet business/ Companies that may get ample benefits are following:

  • Huge businesses with high turnovers that want to stay independent from third-party online payment service providers.
  • Companies that are willing to replace or update their software.
  • Banks that are willing to improve their front-end solution
  • Firms starting as a payment service provider.

Advantages Of An Online Payment System

  • Convenient means of payment.
  • Caters to wider client base.
  • Low cost
  • Safe and secure transactions.
  • Speedy way of transferring and receiving funds.

Steps To Create An Online Payment System

Now that you’ve understood the basics of online payment services, let’s look at how you can create one for yourself. If you’re someone who wants to create an custom online payment system, you can follow these steps:

  1. Hire an expert or consult a professional to make sure all the coding and security is correct.
  2. The next step involves setting up a hosting platform.
  3. Apply for a Secure Socket Layer certification.
  4. Build the payment page.
  5. Look for a payment processor that allows you to process different types of payment methods like credit and debit cards.
  6. The final step is to integrate your payment merchant account with your payment page.

Best Payment Gateways Of 2021

The primary function of a payment gateway is to establish communication between the participants involved in an online payment process. A payment gateway can be very well defined as a complex system that enables Credit/Debit card payments for offline as well as online merchants. By doing so, it creates a smooth passage of financial transactions by encrypting financial information and transferring them between the buyer, seller and the acquiring bank. Thus, it is responsible for ensuring that every single transaction on the system runs safely without any fraud. 

Here we’ve listed a curated online payment gateway list for you.

List Of Top 5Payment Gateways 2021

  1. Paymill

If you’re in the initial phase of building a start-up, Paymill can be a great option for you. This Sweden based payment gateway accepts payments from many methods including direct debit and PayPal credit cards. Thus, Paymill can effectively improve the user experience while making it profitable for the merchant too.

  1. WorldPay

WorldPay offers an all-in-one online payment solution that makes it very smooth for the merchants to deal with payments. This fintech company is known for providing all payment processes with just a single partner for processing and reporting, making it suitable for all types of businesses. The company has not only gained popularity in UK but has also managed to gain credibility in the European market. WorldPay imposes charges on the basis of risk and volume.

  1. PayPal

This American multinational fintech company is one of the worlds largest operating online payment service provider. With a net income of US$2.459 billion, it’s also the most profitable company out there. PayPal offers features such as credit card reader, mobile card reader, barcode scanning, express checkout, inventory tracking, bill me later, online invoicing and shopping cart.

  1. 2checkout

2checkout is a globally renowned payment gateway that allows businesses to accept online payments from buyers across the world. Among its various features that enhances both merchants and customers experience on the platform, some are recurring billing, customized subscription plans, multilingual support and multi-currency support.

  1. Quick Pay

Quick Pay, as the name suggests is a very speedy and hassle-free payment gateway. With features like multi-currency support and approval of many payment methods like debit card, credit card and even PayPal and Sofort Banking, it is right there at the top of best payment gateways.

 Pros And Cons Of Custom Online Payment System


  1. Reduces Cost

When you’re opting for a third party online payment method, you are bound to pay fees for almost every operation and sometimes you’re also required to pay a registration fee. Switching to a custom made online payment system will reduce the overall payment processing costs and will allow you to become your own boss.

  1. Scope For Improvement

One thing that you should be aware of is that there’s no such online payment method that can match all your needs. Some might lack multi-currency transactions and some are just straight away very expensive. Developing a custom payment gateway will ensure that you get the exact end-product.

  1. Additional Revenue

If you own your payment gateway and you’re looking to provide online payment solutions, you yourself can become a online payment service provider. It means you will generate additional revenue through registration fee and transaction fee from other merchants.


  1. Extra Certification Cost

As we’ve already established that to run a payment gateway, you’ll need to connect to the payment processor and comply with the PCI conditions. To be practical, it’s a long and slow process which also requires high cost to be paid.

  1. Time Consuming

Creating your personal customized payment system requires you to spend time on the preparatory phase, pure development, testing and then look after maintenance. All these things are time consuming. However, in the long run it will save you a lot of recurring charges and eventually generate you a new source of income.

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