In the ever-thrilling world of gaming, the speed and security of payments can make or break gaming experience. Payment gateways, which are business solutions that collect and encrypt customer payment data, are essential in this ecosystem.
Here we take a look at why payment gateways matter in gaming, how they work, the challenges they face, and the trends shaping their future.
What Is a Payment Gateway?
A payment gateway online is like a card machine in an offline store. It collects and encrypts customer payment data, such as card details, and then passes it to a payment processor for further communication between the banks. In the gaming industry, payment gateways are essentially the checkout pages that allow players to enter their payment details.
Payment Gateway vs Payment Processor
Payment processors and payment gateways are often confused, but they serve distinct roles. A payment gateway authorises and encrypts payment details. It ensures secure data transfer to a payment processor. Meanwhile, a payment processor handles the actual transaction, communicating with the banks and conducting verifications. Both services are typically offered by the same provider.
Types of Payment Gateway
There are various types of a payment gateway used in gaming:
- Third-Party Payment Gateway: A third-party payment gateway redirects customers to a secure checkout page to enter their payment details, then sends them back to your gaming platform after payment. It’s convenient and avoids direct handling of sensitive data, but some customers may be hesitant to pay on a third-party website.
- Self-Hosted Payment Gateway: This gateway integrates the checkout directly into your platform’s interface. It requires more effort and resources and means you’re responsible for customer data. The benefit is stronger client relationships, as customers trust your site and are less likely to abandon their orders.
- API-Hosted Payment Gateway: An API-hosted gateway sends payment details directly to a processor using APIs, so your business doesn’t store sensitive data. This method ensures a smooth user experience and maintains customer trust while the actual processing happens offsite.
How Payment Gateways Work
For the reasons of scope in this article we’ll be looking at API-hosted payment gateways only. Here is the flow involved:
- Payment Initiation: The player selects a product or service and begins the payment process on the gaming platform.
- Data Encryption: The payment gateway encrypts the player’s payment information to protect it from unauthorized access and sends it to the payment processor.
- Authorisation Request: The encrypted data is sent to the acquiring bank, which forwards the request to the issuing bank (the player’s bank).
- Authorisation Response: The issuing bank verifies the transaction details and responds with an approval or decline.
- Completion: If approved, the payment processor notifies the gaming platform, completing the transaction. Funds are then transferred to the gaming company’s account.
Important Features of Gaming Payment Gateways
When choosing a payment gateway for your gaming platform, consider the following features.
Multiple Payment Options
To cater to a diverse global audience, gaming payment gateways should support a variety of payment methods, including:
- Credit and Debit Cards: These are widely used and accepted worldwide.
- Digital Wallets: Options like PayPal, Apple Pay, and Google Wallet offer convenient alternatives. They are the most popular payment method in the world.
- Cryptocurrencies: This innovative payment method is growing in popularity due to their security and anonymity.
- Open Banking Payments: Pay-by-bank are a cutting-edge payment option that allows direct fund transfers from account to account, avoiding costly card networks.
Security & Compliance
Navigating the complex landscape of financial regulations and security standards is essential for gaming companies. Payment gateway providers can help maintain compliance with various standards, such as the Payment Card Industry Data Security Standard (PCI DSS) and regional data protection laws like the General Data Protection Regulation (GDPR). This support ensures that gaming companies adhere to necessary regulations while focusing on providing a seamless user experience.
Data Analytics
Effective payment gateway providers should offer detailed reporting and analytics tools. These tools provide insights into transaction volumes, player spending habits, and revenue trends. With this information, gaming companies can make data-driven decisions and personalise marketing campaigns targeting high life-time value clients.
Customer Support
Prompt and reliable customer support is essential for resolving payment issues and ensuring a great gaming experience. Payment gateways provide dedicated support services to help players with questions and problems, ensuring everything runs smoothly and satisfactorily.
How to Choose Gaming Payments Provider
Choosing the right payment processor and gateway can significantly improve your gaming platform and enhance your players’ experience. Here’s how to go about it:
- Identify Needs
First, understand what your gaming business requires. Consider security features, budget, desired payment methods, user-friendliness, and compatibility with your current system. This helps you select a service tailored to your platform’s needs.
- Options
Next, evaluate different payment processors. Check their ratings on review sites, focusing on feedback from other gaming companies. Create a comparison table of key features to see how they align with your requirements.
- Trial Period
Finally, narrow down your list and contact the providers for a demo. Many offer trial periods, allowing you to test their services. This step is crucial to ensure the payment processor integrates well with your gaming platform.
