How Much Does it Cost to Develop a Payment Gateway?

Have you ever thought about what it takes to build a payment gateway? How much money do you need to create a safe, reliable, and strong system that processes payments? What are the main things that affect the total cost? And how can businesses plan their budgets well for this important financial technology?

With digital payments growing fast, expected to reach $47 billion worldwide in 2025. Hence, it’s more important to understand how much it costs to build a payment gateway.

The payment gateway business is growing fast. This is because more people are shopping online and using mobile payments and digital wallets. Experts predict that the global payment gateway market will grow from $37 billion in 2024 to $47 billion in 2025. That means it will grow by about 17% in one year.

In India, the payment gateway market is also expected to grow a lot. It could go from $1.6 billion in 2024 to $3.2 billion by 2033. This growth shows that people need payment gateways that are strong, safe, and easy to use.These gateways must support many different payment methods and follow the rules set by the government.

If a business wants to build its white label payment gateway, it’s very important to understand how much it will cost. Knowing the costs helps businesses plan better and create a good payment system.

Key Takeaways:

• Making a simple version of a payment gateway (called an MVP) usually costs between $10,000 and $150,000. If the system is more complex, it can cost over $150,000.
• Keeping the payment gateway safe and following important rules (like PCI DSS) takes a big part of the budget—about 15-20%.
• Linking the payment gateway with banks, card companies like Visa and Mastercard, and other payment services can be expensive.
• After building the payment gateway, you still need to pay for regular upkeep. This includes updates, security checks, and helping customers. These ongoing costs are important to keep the system running smoothly.

What is a Payment Gateway?

A payment gateway is a technology that facilitates online transactions between a customer and a business. It acts as a bridge that connects the merchant’s platform (like a website or mobile app) with the financial institutions (such as banks or card networks) that authorize and process payments.

But it’s not just a channel for transactions—it is also responsible for securing the process. A payment gateway encrypts sensitive information like card numbers, verifies the customer's identity, communicates with banks, and ensures that the transaction is completed accurately and securely.

For example, when a user enters their credit card details to purchase a product from an online store, the online payment gateway:

• Encrypts the payment information
• Sends it to the acquiring bank
• Communicates with the card network (like Visa or Mastercard)
• Receives approval or decline from the issuing bank
• Sends the transaction result back to the merchant and customer

This entire process happens within a few seconds and is completely invisible to the user. It’s this efficiency and security that make payment gateways indispensable in digital commerce.

How Does a Payment Gateway Work?

Understanding how the best payment gateway works is crucial before diving into its development. It may appear simple to the user, but behind the scenes, it involves a sophisticated multi-step communication process.

Step-by-Step Workflow:

Customer Initiates a Payment

The customer selects a product or service, proceeds to the checkout page, and enters their payment details.

Data Encryption

The gateway encrypts this sensitive payment data to protect it from cyber threats.

Transaction Authorization

The gateway forwards the encrypted data to the merchant’s acquiring bank. The acquiring bank then requests transaction authorization from the cardholder’s issuing bank.

Response from Issuer Bank

The issuing bank verifies the details and either approves or declines the transaction based on available funds, account status, or suspected fraud.

Payment Completion

Once approved, the payment is processed, and the merchant receives the payment confirmation.

Settlement and Funds Transfer

The funds are transferred from the customer’s bank to the merchant’s account through the acquiring bank, completing the transaction cycle.

At OZVID Technologies, we ensure that every layer of this process is developed using robust security protocols, seamless integrations, and compliance with regulations like PCI DSS.

Cost to Build a Payment Gateway: A Simple Breakdown

How Complex the Solution Is: The main thing that affects the cost of payment gateway is how complex the payment gateway is. A simple version (called an MVP) that handles basic transactions and security usually starts at about $10,000. More advanced gateways, with better security, many payment options, and strong fraud protection, can cost between $60,000 and $150,000 or more.Very complex systems with many features and global reach might cost over $150,000.

Security and Following Rules: Security is very important and can’t be ignored. Setting up things like PCI DSS compliance, encryption, tokenization, and fraud detection usually takes 15-20% of the total budget. This means spending between $5000 and $50,000. You also need regular checks and updates to keep everything safe and follow the rules.

Connecting to Banks and Payment Services: Payment gateways need to connect with banks, card companies, and other payment services. Setting this up usually costs about $1,000 at the start. After that, monthly fees for hosting or maintaining these connections can be between $1,000 and $5,000. Common connections include Visa, Mastercard, PayPal, Apple Pay, Google Pay, and local banks.

The Development Team: The cost depends a lot on the team building the gateway. You need skilled FinTech developers, security experts, designers, and testers. Paying salaries and other costs for the team is a big part of the budget.

Testing and Quality Checks: Testing the system carefully is very important.This includes checking how it works, its security, and how well it performs.Testing takes time and money but is necessary to make sure the gateway works well.

Ongoing Maintenance and Support: After the gateway is ready, you need to keep it updated and running smoothly. This means monthly maintenance (about $150 per month), software updates every year (costing $8,000 to $15,000), security checks, and helping customers.

Legal and Administrative Costs: You also have to pay for licenses, follow laws and regulations, sign contracts, and cover legal fees. These costs vary depending on the country but are important to include in your budget.

Types of Payment Gateways

Choosing the right type of payment gateway is essential for creating a seamless and secure transaction experience. At OZVID Technologies, we specialize in building various types of payment gateways tailored to your business model, user base, and operational needs. Below are the primary types of payment gateways we develop:

1. Hosted Payment Gateway

A hosted payment gateway redirects users from your website or application to an external payment page to complete the transaction. Once the payment is processed, the user is redirected back to your platform. This model is easy to integrate and is often managed entirely by third-party providers, making it ideal for startups or businesses without large development teams. Although customization is limited, it ensures compliance and quick deployment, especially for businesses with minimal technical resources.

2. Self-Hosted Payment Gateway

In a self-hosted payment gateway setup, payment details are collected directly on your website or app and then forwarded to a payment processor for authorization. This method provides businesses with more control over the user experience and branding while keeping customers on the platform throughout the transaction. At OZVID Technologies, we ensure these gateways are developed with robust encryption and compliance to handle sensitive financial data securely.

3. API/Non-Hosted Payment Gateway

API-based or non-hosted payment gateways allow seamless payment processing without any redirection. Customers stay on your site throughout the transaction, giving full control over the checkout design and user journey. This method offers greater flexibility and customization, making it suitable for businesses with advanced technical infrastructure. We at OZVID Technologies implement secure APIs that integrate with your existing systems, providing a smooth and consistent experience across all platforms.

4. Local Bank Integration Gateway

Local bank integration gateways are tailored solutions that connect directly with regional or national banks. These gateways are commonly used in specific markets where local banking relationships are preferred due to lower transaction costs and regulatory considerations. At OZVID Technologies, we develop custom payment solutions that work seamlessly with banking APIs and ensure compliance with regional financial regulations, offering reliable and secure local payment processing.

Features of a Payment Gateway

When developing a payment gateway, integrating essential and advanced features ensures that your platform is secure, user-friendly, and scalable. At OZVID Technologies, we prioritize high-performance functionalities that enhance both merchant and customer experiences. Below are the key features of payment gateway solution:

1. Multi-Currency and Multi-Language Support

To facilitate global transactions, your payment gateway must support multiple currencies and languages. We ensure that your platform can accept payments in international currencies and offer a localized experience to users from different regions. This not only enhances customer satisfaction but also increases your business reach globally.

2. Real-Time Payment Processing

Fast and reliable payment processing is a cornerstone of digital commerce. Our gateways are built for real-time transaction validation and settlement, enabling instant payment confirmations for both users and merchants. This reduces wait times and enhances operational efficiency, especially for high-volume businesses.

3. Advanced Security Protocols

Security is the foundation of trust in online payments. At OZVID Technologies, we implement the latest encryption standards, including SSL certificates, data tokenization, and two-factor authentication (2FA). We also ensure full compliance with PCI DSS and other global regulations, safeguarding your customers’ sensitive financial data.

4. Customizable Merchant Dashboard

We offer a feature-rich admin dashboard that provides real-time insights into transactions, revenue, refunds, chargebacks, and customer behavior. The dashboard can be tailored to suit specific business KPIs and allows merchants to make data-driven decisions for improved financial management and growth tracking.

5. Recurring Billing and Subscription Management

Recurring billing is vital for subscription-based models. Our payment gateways support automatic payment scheduling, invoicing, and alerts for renewals or failures. This feature is ideal for SaaS companies, membership websites, and services with repeat billing cycles, allowing smooth and uninterrupted transactions.

6. Dispute and Chargeback Handling

Managing chargebacks efficiently is critical to maintaining credibility and reducing financial risk. We build automated workflows for handling disputes, reviewing claims, and maintaining transaction logs, ensuring your team can respond quickly and effectively to any issues.

7. Fraud Detection and Risk Management

Using AI and machine learning algorithms, our gateways can detect suspicious behavior, flag high-risk transactions, and block potential fraud attempts. We integrate tools such as velocity checks, geolocation tracking, and IP monitoring to strengthen transaction integrity.

8. Mobile Optimization

With mobile commerce on the rise, our payment gateways are fully responsive and optimized for mobile devices. Whether customers pay through a mobile website or an app, they enjoy a smooth and fast transaction process. Our team ensures seamless mobile integration without compromising on speed or security.

Final words:

Building a payment gateway is not easy, but it can be very rewarding. It helps businesses take control of how they handle payments, improve security, and give customers a better experience. Knowing how much it will cost and planning carefully is very important. This helps businesses launch their payment gateway successfully and grow well in the busy world of digital payments.

If you are looking to develop a payment gateway for your business, look no further than OZVID Technologies. We are are leading software development company offering the best payment gateway apps to businesses globally. Want to learn more? Contact us today.

Frequently Asked Questions

1: How long does it take to develop a payment gateway from scratch?

Developing a fully functional and secure payment gateway usually takes 4 to 8 months. This includes phases such as planning, design, backend development, compliance integration, testing, and deployment. The timeline can vary based on the complexity of the project and the feature set. At OZVID Technologies, we follow an agile development process to ensure timely delivery without compromising on quality.

2: Is it better to build or buy a payment gateway?

Building a payment gateway offers more control, customization, and potential cost savings in the long run. However, it requires a higher upfront investment and ongoing maintenance. Buying or integrating an existing solution is faster and cost-effective but comes with monthly fees and limited customization. OZVID Technologies helps businesses evaluate both options and offers custom-built gateways that ensure scalability, security, and compliance.

3: Can I integrate my custom payment gateway with other systems?

Absolutely. A custom payment gateway can be integrated with eCommerce platforms, ERP systems, accounting software, CRMs, and more. Our developers at OZVID Technologies create robust APIs and SDKs that allow seamless integration with third-party tools and banking systems, enabling you to streamline operations and enhance your business efficiency.

4: How do integration needs affect the cost of a payment gateway?

The number and complexity of integrations with banks, card networks, and payment services directly impact both initial development and ongoing maintenance costs.

5: Do I need PCI DSS compliance to build a payment gateway?

Yes, PCI DSS (Payment Card Industry Data Security Standard) compliance is mandatory when handling, storing, or transmitting cardholder data. It ensures your payment gateway follows best security practices to protect user information. At OZVID Technologies, we incorporate PCI-compliant architecture in every payment solution we develop to meet regulatory standards and avoid legal risks.