Hosted vs Self-Hosted Payment Gateway
Summary
Hosted payment gateways redirect customers to the provider's secure page, reducing PCI compliance burden for merchants, while self-hosted gateways offer full control over checkout but require robust in-house security infrastructure. The right choice depends on a business's technical capabilities, compliance appetite, and desired user experience.
Pay10 is an RBI-authorized payment aggregator and fintech platform helping businesses across India simplify digital payments with secure, scalable, and enterprise-grade payment solutions. Trusted by startups, SMEs, enterprises, D2C brands, and growing businesses, Pay10 supports UPI, cards, net banking, wallets, payment links, international payments, and advanced merchant solutions designed for modern digital commerce.
Introduction
- Core Operational Decision: Choosing how your payment gateway handles transaction flows directly impacts consumer cart abandonment and your internal compliance liabilities.
- The Balancing Act: Each gateway model comes with specific trade-offs regarding backend data security, checkout user experience (UX), and legal compliance responsibilities.
- Shared Responsibility: With rising global data breaches, safeguarding sensitive financial information is a critical, joint obligation for both online merchants and payment providers.
- The Roadmap: This guide breaks down the mechanics, pros, and cons of the three primary payment processing flows to help you identify the ideal technical fit for your storefront.
Looking for a payment gateway that grows with your business? Choose Pay10 for secure payments, dependable infrastructure, and scalable digital payment solutions.
3 Types of Payment Gateways Based on the Payment Flow
1. Hosted Payment Gateways
When using a hosted payment gateway, the checkout process shifts externally. Once a customer clicks the "buy" button, they are redirected from the e-commerce storefront to the payment service provider's (PSP) secure external web page to enter their payment details. After authorization, the user is automatically sent back to the merchant's site for order confirmation.
| Opportunities | Obstacles |
|---|---|
| Better Technical Support | Risk of Cart Abandonment |
| User-friendly | Payment completes externally |
| Easy to set up with the host (PSP) taking up the responsibility | Slow checkout process |
| Better Security & Fraud Protection | Transaction fees |
Self-Hosted Payment Gateways
Also referred to as Pro-Hosted gateways, this model keeps the user entirely on the merchant's website. Financial data is collected directly by your own web forms and then securely transmitted to a third-party payment gateway for background authorization. This eliminates off-site redirection, resulting in a faster checkout experience.
| Opportunities | Obstacles |
|---|---|
| Merchant has complete control over user experience | No deviation from Merchant’s website |
| No support system | Higher risk of fraud and security breaches |
| Convenient as the entire transaction concludes in one place | Merchants must be compliant |
API hosted Payment Gateway
An API-hosted model allows merchants to imbed payment processing functionality directly into their applications or websites using Application Programming Interfaces (APIs) or HTTP queries. Customers complete their transactions smoothly on your custom interface without redirection, while the heavy lifting of data routing is handled via background API calls.
| Opportunities | Obstacles |
|---|---|
| Device Agnosticism | Merchants must strictly follow PCI-DSS and SSL compliance |
| Easy integration | Need to create custom code for better integrate |
| Fully customisable | Can be Expensive |
Why Choose Pay10?
Pay10 is an RBI-authorized payment aggregator and fintech platform designed to simplify digital commerce with secure, scalable, and enterprise-grade payment architectures. Rather than forcing you into a single setup, our highly scalable, AWS-hosted platform is completely device-agnostic and flexibly supports Hosted, Self-Hosted, and API-driven deployment models.
Expand globally with confidence. Pay10's RBI-authorised cross-border payment solutions help businesses receive international payments through trusted payment infrastructure.
Platform Capabilities & Trust Factors:
- Flexible Integration: Offers developer-friendly web/mobile SDKs, APIs, and low-code plugins compatible with all major e-commerce systems.
- Omnichannel Reach: Seamlessly supports over 100 payment methods, including UPI, cards, net banking, wallets, and dedicated international cross-border capabilities.
- Enterprise Security: Backed by gold-standard compliance, including PCI-DSS Level 1, SAR (PAPG & Data Localization), and ISO 27001:2022 certifications.
- Advanced Analytics: Includes a unified, single-click merchant dashboard for instant transaction reporting, automated reconciliation, and settlement tracking.
Conclusion
Your ideal gateway structure hinges on your in-house developer bandwidth, budget, and compliance readiness. Hosted setups offer the fastest path to market with zero compliance stress, while Self-Hosted and API models give tech-forward brands complete control over their conversion funnel. By unifying all three deployment paths under a single, secure cloud infrastructure, Pay10 ensures your business never has to compromise between security and user experience.
Ready to transform your business checkout? Partner with Pay10 today.
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