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Revolutionizing Transactions: Exploring Real-Time Payments and Building Payment Gateways

Real-Time Payments Market

The payment industry is evolving rapidly, and the future looks bright for businesses that can keep up with the changes. 

According to Fintech Futures, the real-time payment market is projected to grow to $86.89 billion by 2028. This growth will be driven by the implementation of new payment rails that enable faster, more efficient real-time payments for B2B transactions. 

Real-Time Payments Updates for 2023

The introduction of the ISO 20022 messaging standard will also improve security and compliance for cross-border payments worldwide.

As the payment industry evolves, businesses must adapt to stay competitive. One of the most significant changes is the introduction of the US FedNow payment service, which is set to launch in Q2 of 2023. 

This service will provide customers with more next-generation, innovative, instant payment offerings, and banks will need to make infrastructure changes to accommodate these new payment types.

To optimize their payment systems, businesses will need to use a combination of efficient, but expensive real-time payments, and cheap, but slow ACH transfers. This will require the use of algorithms that can calculate the best and cheapest systems and providers to use, depending on the transaction needs.

The Rise of Payment Gateways

Another software that will be widely utilized and sought after in 2023 is payment gateways. Payment gateways are software applications that allow merchants to securely process, verify, and accept or decline payment transactions on their websites or mobile apps. 

They act as intermediaries between the merchant's website or app and the payment processing network of the merchant's acquiring bank, enabling customers to make online payments using their credit or debit cards.

Tips for Building a Payment Gateway

Building a payment gateway can be beneficial for businesses because it allows them to offer their customers a convenient and secure way to make online payments. It simplifies the payment process by automating the handling of transaction approvals and declines, and it can help businesses reduce their fraud risk and grow their revenue.

To build a payment gateway, businesses will need to partner with a payment processor and acquiring bank. The payment processor will provide technical specifications for integrating the gateway with their system, and the acquiring bank will provide a merchant account to accept digital payments. 

However, it can cost between $200,000 and $250,000 to build a minimum viable product (MVP) for a payment gateway, and it may take several months to years to develop the gateway from scratch.

Alternatively, businesses can license a white-label product, which can be up and running in a few months, or use an open-source solution, which may take less time but requires more development and technical expertise. 

Payment Gateways Lead to Optimized and Secure Transactions

Regardless of the approach, having a payment gateway can make it easier for businesses to integrate with other payment services and systems, such as payment processors and payment orchestrators. Payment services can automate the optimization of transaction approvals, which can help increase revenue and improve customer relations.

The use of real-time payments, payment gateways, and payment optimization algorithms can help businesses reduce their fraud risk, increase revenue, and improve customer relations. With the right tools and strategies, businesses can thrive in the rapidly changing payment landscape.

 

 

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This post is from a series of posts in the group:

The Payments Business

Share opinion and experience on how the payments landscape is changing and learn about the challenges and opportunities facing payments stakeholders in the future.


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