Payment integration is the bridge that connects an online store’s checkout to complex payment processing systems. It is the digital architecture that links your online storefront directly to the global financial grid.
By facilitating seamless transactions across a variety of sales channels, an integrated payment gateway ensures you can process payments quickly and securely.
Read on to learn more about how payment integration works, plus Shopify payment integration features.
What is payment integration?
Payment integration is the software link that allows the payment gateway on your online store or in-person point-of-sale (POS) system to communicate securely with a payment processor. When integrated, the payment gateway sends encrypted payment information from your customer to the processor, which handles the movement of funds, communicating between the business’s merchant account and the customer’s issuing bank.
When the integration is active, the sequence for online transactions follows a lightning-fast sequence:
1. Front-end checkout. The customer enters their credit card details or selects a digital wallet.
2. Encryption. In order to maintain PCI compliance, the payment data is encrypted and sent to the payment gateway provider.
3. Gateway communication. The secure payment gateway offers a channel to the payment processor, which then checks with the issuing bank.
4. Confirmation. The integration receives the “Approved” signal, updates the online store, and clears the transaction for fulfillment.
Native vs. API-based payment integration
Businesses generally choose from two architectural paths for integrating payments:
Native payment gateway integration
This approach keeps the payment form directly on your site and is fully integrated out of the box. Solutions like Shopify Payments use this approach to ensure a consistent brand experience and yield higher conversion rates.
Shopify Payments is built directly into your ecommerce site and features native fraud protection, can accept payments in multiple currencies, and has direct integration with your business bank account. Card processing rates start at 2.9% + 30¢ per transaction for US sellers on the Basic plan, and decrease for higher-tier plans.
API-based payment gateway integration
Payment providers like Stripe and PayPal offer payment APIs that integrate your storefront with their payment processors. These can be practical for online businesses operating in regions not yet served by Shopify Payments or for industries with unique high-risk profiles. Note that these providers often charge their own monthly subscription and fixed fees.
Integrated vs. hosted payment gateways
Integrated payment gateways keep the entire checkout process within your ecommerce storefront. The customer enters their payment details on the checkout page itself. Native payment gateways like Shopify Payments offer this capacity, as do API-enabled integrations from payment processors like Square and Stripe.
With hosted payment integration, the customer is briefly redirected to a secure page hosted by a payment provider like Stripe. This can reduce an ecommerce brand’s security liability, as the sensitive payment data never actually hits the brand’s server. However, redirecting to a hosted payment page can affect the user experience, extending the length of the checkout process by adding an additional step.
Payment integration FAQ
What is the benefit of payment integration?
Payment integration creates a seamless link between your store and the financial network. The primary benefits include ease of use, fast transfer of funds to your bank account, and built-in fraud protection.
What is the payment integration process?
On platforms like Shopify, integrated payments are built in or plug and play. You navigate to your Payments settings and activate Shopify Payments or select a third-party payment gateway provider. For custom sites, developers use payment APIs to connect payment pages with payment processing solutions.
What is the best payment integration platform for ecommerce?
Although a payment gateway comparison depends on your specific business needs, Shopify Payments is a top choice for online payments due to its native integration and support for Shop Pay.
