Nov 19, 20185 min read

Payment Gateway Integration: the Good, the Bad, and the Ugly.


When merchants think about integration, they don’t usually think about ‘smoooth’. Unfortunately, not all payment gateway integration experiences are friction-free.

There’s no single way to onboard a new payments gateway solution, just as there’s no one-size-fits-all platform for merchants. Luckily though, there are a number of solution providers that can deliver online payment services without breaking the bank – or your sanity.

To help merchants understand the right integration path, we’ve dug into what makes for an excellent gateway experience, what creates a negative outcome, and what can make the process just plain ugly.

The Inner Workings of a Payment Gateway Integration

The Good

Let’s start with the good news. A payment gateway is a key middleman in the payment process, and is designed to enhance the experience through better integration, enhanced security, and stronger compliance measures.

A good payment gateway integration will ease the on-boarding of additional software solutions, which enable better payment experiences. From the payment processor, to the types of payment methods a merchant accepts, a solid payment gateway integration brings the ability to empower customers with more choices about how they want to pay.

A good payment gateway integration will also deliver a seamless, user-friendly cross-channel experience. We believe integration should only happen once. Payment gateways with flexible integrations let merchants adopt new payments products and solutions as they enter the market without need for an overhaul. At Klarna, our payment gateway integration equation allows merchants to access pre-configured toolkits and developer-built codes, which are easily dropped into your existing e-commerce platform for any of our unique payment solutions.

That’s what we mean when we talk about smoooth. Payments made simple and safe. We take on one-time integration (and the risk), to let merchants like you manage what you’re best at, growing your customer base.

The Bad

As many merchants have learned, integration isn’t always easy. Especially if you’re not working with the right payment solution partner. The wrong gateway solution leaves merchants dealing with integration snafus having to do with speed, security and compliance.

When a merchant enters a payment gateway relationship, they expect a fair, transparent experience.

Unfortunately, payment gateways often hide high processing costs, extra fees and expensive set up costs that merchants can easily miss when selecting a provider. These hidden fee structures aren’t transparent, and can cause unforeseen costs that add up quickly before a merchant realizes the true impact.

How a gateway provider bills a merchant is typically related to transaction volume. Since a gateway is critical in the collection of payment details, authentication, authorization and settlement of a payment, it’s important to choose a solution that doesn’t allow for errors in this four-step process.

Merchants need to be able to trust their payment gateways. This rings true when it comes to managing payment disputes and chargebacks — two critical pain points for merchants.

When it comes to payment gateway integration, it’s not all about processing speed and efficiency. It’s about how well the platform provider is able to work with the merchant’s existing systems, and how it can help a merchant develop. If yours isn’t delivering, it’s time to look elsewhere.

The Ugly

Now let’s talk about every merchant’s biggest fears when integrating a payment gateway: friction. That’s the ugly side of the payments equation that some solution providers can’t overcome. You don’t want to be stuck with a gateway with a clunky interface that doesn’t allow for new, innovative software to be easily on-boarded into your existing system.

Offering a frictionless gateway experience means being able to deliver, especially on mobile. As merchants conduct business across mobile devices, gateway solutions that don’t translate well can create a bad user experience. With m-commerce capturing an increasing amount of retail spend every year, merchants can’t afford to work with a gateway solution that can’t deliver equally on desktop, mobile and tablet. Each of these cross-channel experiences must be seamless.

When thinking about payment gateway integration, merchants should always consider the end-user experience. The wrong gateway can create a disconnect between merchants and their customers. The payment gateway takes on the responsibility for ensuring fast and secure transactions, but it also takes on the burden of being the relationship manager between the payee and the payment processor. This process is key for producing a positive user experience.

When the integration itself isn’t built to be user-friendly, the problems can snowball across a merchant’s entire payment processing system. This trickles into the user experience, which can hurt a merchant’s brand value.

Bottom line? Merchants need a payment gateway partner that is upfront about costs, has the right compliance and security requirements (PCI DDS, encryption, tokenization), and can deliver on their solution as promised. It’s okay to expect more from your payment gateway partner. How well they operate directly affects the customer journey, and you want that to be a positive influence.

Ready to achieve that outcome? That’s what we live for at Klarna. Gateway solutions that are easily integrated and equipped with a host of features are out there. There’s no reason to settle for bad or ugly. It’s time for smoooth.