The Power of Open Source: A Game Changer for Business Payments
While some may be under the assumption that open source payment gateway technology is completely free, this is simply not true. Currently there aren’t any mainstream open source payment platforms available for free.
Although there may be solutions floating around advertised as being free, they have other costs associated with them. First of all, the environment has to be PCI compliant, netting an annual $20-30k in audit costs. Furthermore, additional costs arise from maintaining a standard amount of 4 or 5 nodes, and a new relationship with an acquiring bank has to be built from the ground up. Due to the latter, an acquirer integration is also required. Merchant onboarding and provisioning, in addition to payment reconciliations, also have to be considered later down the line. Including EMV certifications, this process repeats if you require new terminal solutions.
Why Open Source is so Beneficial
One of the key aspects of open source payment platforms is their customizability and modularization. Usually some basic functions are provided as a foundation for developers to create their own modules. This allows them to customize and expand the functionality of the platform to suit the needs of their business.
Unrestricted access to the code significantly eases the process of adding new features. For instance, more payment methods could be added to do business abroad. While developing with an open source payment gateway as a base or even starting from scratch come with their own benefits, it is important to be aware that the processing volume should be high enough. This ensures that the lowered fees from software development are profitable and offset the cost of maintenance.
Payment Gateway Merchant Fees
The amount a merchant has to pay the payment gateway provider usually includes the following: fees from the gateway, the acquiring bank, and the processing cost. Furthermore, we can examine some specific items further:
- Interchange and Settlement costs. While these can be simply eliminated by directly integrating with Visa or MasterCard, this is usually only beneficial when you have a large processing volume. It is also reasonable to avoid direct integration with Visa or MasterCard if there is a high turnover, usually around several billion dollars annually. These situations lend themselves to the idea that it may be better to partner with an acquiring bank instead.
- Surcharges. The amount necessary to be paid is derived from the processing volume and agreement with the acquirer. These can be calculated from the amount of interchange and assessments on a merchant’s statement. Here you can see the surcharge required along with the gateway fees. In the case you can’t do the necessary calculations, some average amount (1.8%, for instance) can be used to estimate. However, it is important to keep in mind that the actual values vary based on the type of transaction and payment card. Surcharges can be reduced by using an open source gateway or developing one from scratch. However, it is also important to remember that the true amount saved is dependent on the processing volume and the agreement with the acquiring bank.
- Processing costs. These are paid to card brands such as Visa and MasterCard for using their network. This item is especially difficult to reduce.
How the UniPay Platform Functions
The UniPay Gateway is a white-label open source payment processing solution. It contains several features useful for modern businesses, including supporting 3D Secure, EMV, P2PE, supporting different types of payment cards, and ACH transactions. Additionally, UniPay allows for international payments from various global integrations.
Included in the UniPay software package is integration logic and features aimed at PayFacs. Multiple integrations have already been implemented with chargeback management and features concerning recurring payments. With just the open source code itself, you get access to an EMV terminal solution and an omnichannel mobile payment solution. In order to fit the software to your business’s needs, licensing the software allows you to modify the code to fit whatever needs you have.
UniPay Gateway is not just limited to larger corporations and enterprises. A small monthly fee opens up the opportunity for smaller entities to take advantage of our open source white-label solution.
The way the UniPay Gateway solution is provided allows for a smoother transition into the realm of payment processing. It can be easily started by simply using a hosted solution. Whenever you feel that your business is ready to utilize the open source nature of UniPay Gateway, you can license the source code and install directly into your data center. This way businesses can evolve as they grow and experience more processing volume.
If you want to learn what an open source payment platform should look like, or how to know which solution is best for your business, feel free to contact and ask our experts.