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Payment Gateway Features: Hosted Checkout API for Beginning Online Businesses

Payment Gateway Features: Hosted Checkout API for Beginning Online Businesses

The user experience (UX) of any online business is crucial to its success. A smooth and seamless UX can significantly influence profit margins by reducing cart abandonment rates. As businesses scale, enhancing the UX becomes essential, with a primary focus on upgrading their payment gateways. Initially, a fledgling online business might suffice with a simple payment link due to its straightforwardness and rapid payment processing—key features for those new to eCommerce or starting their digital transition. However, as the business grows, there's a need to adopt more sophisticated solutions like integrated payment gateways or payment APIs.

The shift may seem daunting, especially for new online businesses accustomed to plug-and-play payment apps. Integrated payment gateways often require some technical skill to implement due to their role as intermediary software that facilitates quick, automated payment processes. Fortunately, for those opting for simplicity, hosted checkout APIs present a less intimidating alternative. Hosted by a third-party provider, these APIs integrate effortlessly with existing checkout systems, sparing businesses the complexity of developing their own payment systems from scratch. This approach not only saves time but also demands minimal effort from the merchant for integration, as most services are managed by the third-party provider.

Understanding online checkouts and the workings of hosted payment APIs is vital for any growing online business, preparing them for future expansion and success in the competitive digital marketplace.

What is an Online Checkout?

The concept of online checkout in an eCommerce store is straightforward: it's the designated 'area' where buyers finalize their purchase of goods or services. This typically involves a dedicated checkout page that presents a variety of payment methods. Despite the diverse nature of eCommerce businesses, catering to both B2C and B2B sectors, the fundamental user experience at checkout remains consistent and generally unfolds as follows:

  1. Selection Process: Users select the items they wish to purchase and proceed to the checkout.
  2. Information Entry: They enter necessary details such as their name, email address, shipping address, and country.
  3. Order Review: Users are directed to an order summary page where they confirm their details before placing the order.
  4. Payment Submission: Finally, users enter their payment details and confirm the order.

These core aspects of the online checkout experience are largely uniform across eCommerce stores worldwide. The selection of payment methods available often plays a crucial role in securing a successful sale. This importance stems from user's payment preferences and the tendency to stick with familiar payment methods. For instance, some customers prefer card payments for their ubiquity and convenience, while others might opt for bank redirects due to the direct link with local banks. Offering multiple, especially localized, payment methods can significantly enhance customer retention and satisfaction by catering to these preferences.

Preparing User Data on the Payments API

Transactions in eCommerce typically involve two key parties: the seller offering the product/service and the buyer acquiring it. The commonality between them, besides the exchange of legal tender and products, is the necessity for information verification. This includes verifying a seller’s legitimacy for the buyer and a buyer’s identity for the seller. Given the inherent remoteness and anonymity of cyberspace, acquiring detailed information becomes crucial for any successful eCommerce transaction.

As a seller utilizing a hosted payment API, setting up your data on your chosen payment gateway’s database requires just a few commands or calls as outlined in the API documentation provided. For new buyers, you can employ the API call function that creates a new user profile in the payment gateway’s database. For returning customers, a ‘get user’ call function allows you to retrieve the existing buyer details from the database. Additionally, buyer data can be seamlessly saved into the database as they input their information during the first checkout step using the same ‘create user’ API call.

This streamlined process not only ensures secure online transactions but also enhances the online checkout experience, making it smoother and more efficient for both sellers and buyers in the eCommerce environment.

Creating the Underlying Transaction for Checkout

Once both your data (as the seller) and the customer’s data (as the buyer) have been prepared, the next step is to create the underlying transaction for checkout. The process of setting up this transaction can vary depending on your payment provider, so it's crucial to be well-acquainted with your provider's specific terminology and procedures. For initiating checkout, you'll need to understand the terms related to creating a transaction unit versus processing payments. For instance, Tazapay refers to their transaction units as "escrow," so you would initiate a transaction by creating escrow.

Following this setup, you can proceed to integrate your inventory data into the payment gateway. This ensures that the total cart amount is accurately recorded and logged. Such integration not only streamlines the transaction process but also enhances the online checkout experience, ensuring that all details are correctly aligned with the hosted checkout API.

Redirecting Buyers to the Hosted Payment Page

By this stage, the buyer is at the final step of the checkout process, as outlined earlier. While the process may seem complex, it's important to note that most tasks are managed automatically by the API’s protocols, requiring minimal, if any, input from the seller in real time. This ensures a painless, smooth UX).

Once the buyer clicks the purchase button, this should trigger an API call to create a payment page. The specifics of these calls and their functionality vary from payment provider to payment provider. For example, with Tazapay, this function is called ‘create payment,’ as their unit for generating a payment page is termed ‘payment’. Regardless of the nomenclature, the newly-generated payment page is where the buyer completes their transaction using any of the payment methods offered by the payment gateway.

Depending on the payment gateway, you may also have the flexibility to enable or disable payment methods to optimize profitability. If all goes well, the buyer completes their payment, and you, the seller, can proceed with fulfilling the order—shipping the purchased items to the buyer’s address promptly.

How can Tazapay Help?

Now that you are familiar with the workings of a hosted checkout API, you can approach the selection of a payment gateway with greater confidence, ready to scale and expand your business. Tazapay’s wide range of local and global payment methods, easy API integration, and digital solutions, is poised to help grow your business efficiently.

This approach not only secures the transaction but also optimizes the efficiency and accuracy of the eCommerce payment integration, providing a seamless and reliable service for both sellers and buyers in the digital marketplace.

Contact us to integrate today!