The Cost of Providing a Payment Gateway: Considerations and Steps

Greetings!

If yoursquo;re considering becoming a payment gateway provider, you might be wondering what the cost implications are. As a product manager for UniPay Gateway at United Thinkers, I can offer some insights based on industry standards and practical experience.

Conceptual Options for a Payment Gateway

When designing a payment gateway, you have several technological options to consider:

Implement a white-label third-party gateway product: This option is the most cost-effective but offers limited customization. License an open source payment gateway product and customize it: This provides a good balance between cost and control, but still requires significant development work. Build your custom payment gateway from scratch: This is the most expensive and time-consuming option, but it offers the highest degree of control and flexibility.

Essential Steps to Establish a Payment Gateway

Here are the key steps you need to take to establish a payment gateway:

Obtain a gateway software license: This typically ranges from $50,000 to $250,000. Establish partnerships with acquirers and processors: The cost can vary from $5,000 to $15,000 per integration. Ensure PCI compliance for your solution: This can cost around $25,000 annually for an audit and $3,000 to $5,000 per month for hosting fees based on four servers for backup. Implement a tokenization solution: This can cost anywhere between $50,000 to $100,000.

Rough Cost Estimates

Below are rough cost estimates for establishing a payment gateway:

Gateway software license: $50,000 to $250,000 Tokenization appliance: $50,000 to $100,000 Annual PCI audit: $25,000 per year Monthly PCI hosting fee: $3,000 to $5,000 based on four servers for backup Bank and processor integrations: $5,000 to $15,000 each

White-label solutions are the least expensive, but they do not allow you to control and customize the processes. Licensed and custom solutions are more costly but provide higher degrees of control.

Time Frame for Development

The process of developing a payment gateway can take anywhere from 6 to 18 months or longer, depending on the complexity of your solution.

Useful References

For more detailed information, you can refer to the free white paper on How to Have Your Own Payment Gateway. Additionally, there is a short video that succinctly explains the key points in just 3 minutes:

In conclusion, providing a payment gateway involves significant financial investment and a considerable amount of planning. Carefully considering your options and understanding the associated costs can help you make informed decisions and ensure a successful launch.