Payment Gateways and Mobile Payment Solutions

Mixing the above two solutions is not an easy thing. Paying for a product using mobile payment gateways is convenient, especially for us here in Kenya who have come to trust our mobile phone companies with quite a bit of our monies but cannot dare do the same with Visa or MasterCard for some reason. Even with their debit card solutions – for those of us who are afraid of credit.

From my experience, at least with Safaricom’s M-Pesa in Kenya, there are more outages of their crucial service in a month that I have ever had with Visa, MasterCard or any other major credit card vendors. And when M-Pesa or other mobile payment solutions are not experiencing an outage or sorts, they are experiencing what they like to refer to as ‘delays’.

Now, to the normal person, this is to be expected. Granted, mobile payment solutions are still quite relatively new in any market. They have therefore not had the chance to make mistakes, fail, and grow to be established robust platforms like their competing card platforms. So in a way, the outages and delays are to be expected. But this causes a lot of problems for integration to systems that are used to robust platforms.

Having had experience in building mobile payment gateway plugins for various systems using PesaPal as the mobile payment gateway provider of choice, I must say I can see their problems in trying to seamlessly and securely integrate the mobile payment solutions. There are flaws though.

Most existing payment gateways, whether they be major credit card gateways like Visa and MasterCard or third party gateways like PayPal or 2CO, offer two statuses for any payment transaction. Successful or Failed. Simple. Apart from that, they may offer a cancel URL if the user for whatever reason decides to cancel a transaction.

In fact, not that I think about it, with third party payment gateways like PayPal, they simply never return a failed result back to the originating site. If for whatever reason a transaction does not go though, they will keep you in the payment gateway page asking you to try another credit / debit card or payment method / source until the transaction is successful. The only other option a user has if a transaction cannot go through is to cancel it altogether.

Now while this may sound like common sense, it does not play that way when it comes to mobile payment gateway. As mentioned above, due to downtimes and delays, mobile payment gateways have one more transaction status that just has online system baffled. This transaction status is ‘Pending’.

Majority of the online e-commerce systems do not support this status for use with payment gateways. They support a ‘Pending’ transaction status for more manual payment methods like Money Orders or Wire Bank Transfers. And by manual, I mean that there is no automated electronic method of marking said transaction as paid or unpaid. The system admin will have to manually change the status of said transaction once they get or not get confirmation of the transaction status either from their bank, post office or wherever.

So with mobile payment gateway providers (Like PesaPal) offering a status of ‘Pending’ for transactions going through them, and with this pending transaction status making the site work more like a manual confirmation payment gateway, why use the 3rd party mobile payment gateway at all? If the admin has to keep checking the status of a transaction, either via a cron job or by refreshing their PesaPal transactions page, why not simply get yourself a phone that accepts the mobile payment solution you want to provide, and manually update the transaction status when your phone chimes as payments check in?

All said and done, there are benefits to using the payment gateway. Having a know brand handle you payments saves small site owners a customer care headache when it comes to payment queries. They also help in keeping your books straight and in knowing how much money checked in and for which products or services, e.t.c. Therefore, the transfer fees and commissions you are paying per transaction as a merchant might be paying off to some extent at the end of the day. So it is still beneficial to use the 3rd party mobile payment gateway solutions if you want to provide mobile payment options on your site.

That being said, there is still a lot more they can do to make the automation process smoother and usable for developers to be able to integrate Instant Payment Notification (IPN) systems via their payment gateways.

I will therefore follow up this article with on on how the current 3rd party mobile payment solutions really work (from a developers standpoint) and how they ought to work. So do watch this space if you are interested.

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