Find more about the many different types of payment gateways, such as hosted systems and ones that use APIs. This blog explains how each model works, what its pros and downsides are, and which one is best for your firm.
What Payment Gateways Do for Businesses Now
Online businesses need to make sure their transactions are safe and swift in today’s fast-paced digital market. Payment gateways help businesses make sure that transactions are safe and that the checkout process goes smoothly.
PayFirmly has been working for years to combine, test, and improve a wide range of payment gateways for businesses of all sorts, from small eCommerce startups to large enterprises throughout the world. As part of our payment orchestration services, we help businesses combine several types of gateways. This makes it easy to get approvals, route traffic, and scale up.
It’s really important to understand how different kinds of gateways work. Some people care more about how fast and easy it is to use, while others care more about control, flexibility, and compliance. Setting up the right gateway could make your payments faster and cheaper, no matter what kind of business you have, like a marketplace, a subscription service, or a service for big businesses.
Payment Gateway, Payment Processor, and Payment Orchestration
Before you choose your payment infrastructure, you should know the differences between payment gateways, payment processors, and payment orchestration platforms.
Payment Gateway:
This is a secure connection between your app or website and the payment processor. It collects and encrypts clients’ payment information and sends it for approval.
Payment Processor:
Talks directly to banks and card networks to decide whether or not to approve a transaction. It is the “engine” that handles payments that were made through the gateway.
Payment Orchestration:
PayFirmly’s AI-powered orchestration layer is an example of a current solution that brings together several gateways, processors, and payment methods into one smart system. It uses AI to automatically transmit transactions through the best channel, which makes things run better, gets more approvals, and lowers expenses.
Most of the time, a company just has one gateway when it first starts. As a firm grows, it employs orchestration to manage sophisticated operations that go beyond boundaries in a way that is more flexible and efficient.
Different types of payment gateways for companies
As businesses grow, choosing the correct payment gateway becomes a strategic option that influences customer satisfaction, conversion rates, and compliance.
PayFirmly has dealt with all the main types of gateways, from simple hosted setups to more complicated systems that use APIs. Our payment orchestration services for businesses all around the world have also made them better.
| Type | How It Works | Best For | Advantages | Limitations |
| Hosted Payment Gateways | Redirects customers to a third-party payment page (e.g., PayPal, Stripe Checkout). | Small businesses & startups | Easy setup, minimal PCI DSS responsibility | Less control over checkout UX |
| Self-Hosted Gateways | Collects payment data on your site, then securely sends it for processing. | Mid-size to large businesses | Custom checkout, improved flow | Higher compliance responsibility |
| API-Integrated Gateways | Processes payments directly via APIs within your site/app. | SaaS & marketplaces | Full control, automation, analytics | Requires technical resources |
| Local Bank Gateways | Operates via domestic banks for local transactions. | Local merchants | Simplified compliance, low fees | Limited scalability |
You can use PayFirmly’s payment orchestration platform to merge numerous gateways into one. This makes sure that everything is flexible, well-thought-out, and always works.
A complete list of all the different types of payment gateways
1. Hosted Payment Gateways
Hosted gateways take consumers to a secure page on a third-party site where they can conclude their purchases. They are great for small businesses who need to get things going quickly and don’t want to deal with a lot of rules and regulations. PayPal and Stripe Checkout are two services that keep sensitive payment information safe outside of the merchant’s system. This keeps the greatest level of security without requiring merchants to get their PCI DSS certification. But they don’t let you change the design very much, which could have a tiny effect on conversion rates.
2. Self-Hosted Payment Gateways
Payment gateways that you run on your own Businesses can collect payment information directly on their websites with self-hosted gateways and then deliver it safely to processors. You can change things around more with this model, the checkout procedure is easier, and the branding is better. Using AI technology to find fraud in self-hosted installations could make transactions much safer and faster, but it also means that businesses need to do a better job of protecting their data and following the rules.
3. API-Integrated Payment Gateways
Payment gateways that can use APIs API-integrated gateways are the most flexible and work well for SaaS platforms, marketplaces, and businesses that process a lot of transactions. They operate well with AI-driven analytics tools and crypto payment orchestration platforms. They also offer automation, subscription billing, and payments in a number of currencies. Companies may fully control the customer experience and use smart routing to make payments through the appropriate channel.
4. Local Bank Gateways
Local bank gateways connect directly with regional banks to handle payments made in local currencies. These are great for small and medium-sized firms who only want to sell to certain groups of people.
They don’t scale very well, but they do have high compliance alignment and cheaper fees. Even local gateways can be part of a global payment strategy when they are all put together by PayFirmly’s payment orchestration services.
Payment Gateways by Industry Focus
Different industries have different rules for following the law, levels of risk, and ways of doing business. That’s why gateways that are customized to each business are so important for getting more people to succeed.
- Gaming and digital entertainment: made for quick cross-border payments and comes with capabilities to stop fraud and money laundering.
- eCommerce: Works with currencies from all around the world, recurring billing, and well-known shopping cart platforms like Shopify and WooCommerce.
- Subscription Platforms and SaaS: They can employ API-integrated gateways to automate invoicing and user authentication on a regular basis.
At PayFirmly, we tailor our payment orchestration services to each industry. We also offer AI-driven optimization and crypto payment orchestration services for merchants who want to grow their business internationally.
The Good and Bad Things About Each Type of Payment Gateway
The gateway you choose will depend on how much control, scalability, and compliance you need.Cons: It has to deal with compliance and data safety on its own.
- Real-World Insights on Comparing Performance: Integration and Setup: Hosted gateways are the easiest to set up, while API-integrated options give you the most freedom.
- Pricing: PayFirmly’s sophisticated AI routing can save processing expenses by up to 30% for API installations.
- Speed: Gateways that use APIs give approvals right away, while hosted ones add a little bit of reroute time.
- Security: All gateways obey PCI DSS rules, but orchestration makes sure that all of them are following the rules.
- Customer Experience: Hosted gateways are easy to use, but integrated ones make the flow on-site smooth.
How to Pick the Best Payment Gateway
The right gateway for you depends on what you need it for:
- Choose hosted gateways if you want to start up quickly.
- Choose self-hosted gateways if you want to control your brand.
- Use API-integrated gateways for payments that span borders and for automation.
- Choose bank gateways for payments made in your area.
PayFirmly’s payment orchestration services bring together all the many markets and crypto transactions that enterprises have to deal with.
In conclusion
Selecting the right payment gateway isn’t only a functional choice; it’s also a strategy to grow your company. Each category helps your business expand in a different way, from hosted simplicity to API-driven control.
With PayFirmly’s AI-powered services, you don’t have to pick just one payment orchestration solution. We use AI to speed up approvals, identify fraud, and enhance routing in real time by combining many gateways and processors into one intelligent system.
Our crypto payment orchestration services make it simple for your payment system to grow with your business, no matter what kind of payments you’re processing. They also make sure that your payments are safe and legal anywhere in the world.
PayFirmly makes sure that your system grows faster than rivals in a world where simple payments show trust.