This guide will explore essential aspects businesses should consider when choosing payment processing software, from core functionality and scalability to critical security measures and practical integration strategies.
Launching an online payment service involves solving various organisational and technical challenges. As with any business, these challenges are diverse and influenced by internal and external factors.
However, here we will highlight four critical aspects directly influencing all other areas when launching a new payment service provider (PSP):
When discussing the business model of an online payment acceptance service, we do not mean your company's overall business strategy or monetisation approach. Instead, we ask: "Will your PSP aggregate payments for clients or purely facilitate transactions?"
For clarity, let's examine two primary models: "The Processor" and "The Aggregator."
This model focuses exclusively on technical solutions. Typical services include seamless integration between online merchants and various payment methods, fraud protection, transaction security, reporting, and analytics.
Importantly, the Processor does not handle client funds directly. Transactions occur between merchants and payment systems, requiring merchants to individually register with each payment system they use.
The Aggregator extends the Processor's role by providing financial services. It collects payments on behalf of merchants across multiple payment systems, consolidating these into a single payment sent directly to merchants.
If considering aggregation, keep in mind:
In short, choosing an Aggregator model requires additional investment, time, and complexity compared to the Processor model.
While the instinct might be to target everyone who accepts online payments, it's more strategic to answer:
Answering these questions helps you identify essential payment methods, competitive pricing, and required features for your processing platform.
The most widely used online payment method remains bank payment cards, with VISA and MasterCard leading globally. Any PSP should at minimum offer card payment acceptance.
However, each country or region may have popular local payment solutions beyond card transactions, including e-wallets, bank transfers (e.g., BankLink in the Baltics), or prepaid vouchers (e.g., Paysafecard in the UK).
Including popular local payment methods alongside international cards significantly increases your appeal to merchants.
Your choice of payment methods directly impacts your processing platform's technical and operational requirements.
The processing platform underpins your PSP's services, impacting service quality, scalability, and stability. A reliable platform can offer a significant competitive advantage even for new entrants.
Selecting the right processing platform from the start is crucial, as changing later can be complex and costly.
There are three main options for acquiring a processing platform:
Building a platform internally might initially seem appealing due to the flexibility it offers. However, this path is time-consuming and costly:
Although this option offers maximum customisation, ongoing high costs and complexities often outweigh the benefits.
Purchasing a ready-made platform significantly reduces launch time but carries high upfront costs, often reaching six figures. Additionally, any modifications will involve substantial fees charged by the platform vendor.
You will still need to handle PCI DSS certification independently, although the vendor typically assists with software preparations.
This option suits businesses with substantial budgets and tight launch timelines but requires careful consideration of ongoing maintenance and modification costs.
Renting a white-label platform significantly lowers costs without compromising on quality. Platforms such as beGateway by eComCharge offer:
Renting a platform removes the need for costly internal technical teams and annual PCI DSS certification expenses, making it a cost-effective solution for most new PSPs.
