When evaluating online payments, you quickly encounter the different types of payment gateway, and the decision isn’t trivial. The model you pick shapes your checkout UX, approval rates, and PCI workload. Choose wisely, and you’ll achieve a fast, on-brand flow; choose poorly, and you risk cart abandonment, unnecessary declines, and ongoing compliance tasks. This article breaks down hosted and integrated approaches, allowing you to align them with your current resources and the scale you desire for tomorrow.
What a Payment Gateway Does
A payment gateway securely collects a shopper’s payment details, passes them to processing networks for authorization, and returns a success or decline to your site. Depending on the risk or regulation, the customer may be required to complete an additional authentication step before authorization is completed. Your choice of gateway model determines how much of this flow you manage and how much you outsource.
Implementation Models and different types of payment gateways
You’ll most often choose between two models:
- Hosted: your site redirects shoppers to a provider-hosted payment page and then returns them to your confirmation page.
- Integrated: you keep the checkout on your domain (self-hosted or API/SDK with tokenization) while the provider processes the transaction.
These are the most common types of payment gateway for web checkouts. Platform-specific and local-bank connectors also exist; however, the decision between hosted and integrated is the primary consideration.
Hosted Payment Gateways
How Hosted Gateways Work
Your checkout hands off to a secure, provider-hosted page where customers enter payment details. Afterward, the customer is redirected back to your site with a payment result.
Pros of the Hosted Approach
- Fast to launch with minimal code.
- A small PCI scope is required because the provider collects card data.
- Fewer moving parts to maintain over time.
Cons of the Hosted Approach
- With less design control, the redirect can feel like “leaving” your site.
- Potential friction from an extra step or slow redirects.
- Pricing trade-offs: Simplicity can carry higher fees, depending on volume and features.
Integrated Payment Gateways (self-hosted/API)
How Self-Hosted Integrations Work
You present the payment form on your domain and post details server-side to the gateway. You keep users on-site and tailor the UI, but take on more responsibility for secure implementation and updates.
How API-Based Integrations Work
You use a client-side SDK or hosted fields to exchange sensitive data directly with the gateway, which then returns a token to your server. You keep full checkout control while limiting direct exposure to cardholder data.
Pros of the Integrated Approach
- Seamless, on-site UX with brand control.
- Advanced features include saved cards, one-click purchases, installments, and dynamic wallets.
- Optimization levers include routing, retries, and granular analytics.
Cons of the Integrated Approach
- More engineering to build, test, and maintain.
- Ongoing compliance and secure coding practices remain essential—even with tokenization.
Comparison: hosted vs integrated
Customer Experience Across Different Types of Payment Gateways
Hosted checkouts add a redirect step that you must brand and optimize for speed. Integrated flows keep customers on your site, which usually feels faster and more cohesive when implemented well.
Security and Compliance
Hosted models typically minimize your PCI scope because a third party captures card data. Integrated/API models also maintain a low scope by utilizing tokenization and 3-D Secure where required; however, implementing controls correctly is still necessary.
Performance and Reliability
Integrated/API models give you more control—such as smart routing and observability—to improve authorization rates and fail over during incidents. Hosted models rely more heavily on provider defaults, so the quality of the provider matters.
Implementation Effort and Maintenance
Hosted is the simplest and quickest. Integrated solutions require more developer time to handle UI states, error cases, SDK/API changes, and webhooks, but they repay the effort with better control and long-term optimization.
Cost and Flexibility Considerations
The total cost includes gateway fees, processing, cross-border and multi-currency pricing, disputes, and any additional services such as risk tools. Hosted models can cost more per transaction for convenience; integrated models can be more competitive at scale but require ongoing engineering investment. Map costs to your transaction mix and growth plans.
Side-by-side Summary
| Dimension | Hosted | Integrated (self-hosted/API) |
| Checkout UX | Redirect to external page; quick to enable | On-site, branded flow; customizable |
| PCI scope | Low; provider captures card data | Low with tokenization/SDK; higher if pure self-hosted |
| Speed | It may be slower due to the redirect | Often faster; fewer hops |
| Engineering effort | Low | Medium–High |
| Optimization levers | Limited | Extensive (routing, retries, saved cards) |
| Global methods | Provider-dependent | Broad with API integrations |
| Cost profile | Convenience can cost more | Competitive at scale; higher build/maintain cost |
Use Cases and Decision Factors
When a Hosted Model Is a Practical Fit
Choose hosted if you want to launch quickly, keep your PCI scope small, or pilot new markets with less engineering. It’s also suitable when your catalogue or funnel is simple and the design trade-off is acceptable.
When an Integrated Model Is a Practical Fit
Utilize integrated solutions if you require on-brand UX, seamless payment experiences, or advanced optimization features (such as routing, retries, and wallet orchestration). It’s the better fit when you expect to iterate on checkout and scale globally.
Decision Criteria Across Different Types of Payment Gateways
Evaluate by conversion, security, markets, and total cost:
- Conversion & UX: On-site speed and design vs redirect simplicity.
- Risk & Compliance: Your appetite for PCI scope, tokenization, and 3‑D Secure.
- Scale & Markets: Payment methods, currencies, and data visibility.
- Total Cost: Fees + Engineering + Operational Overhead.
Cross-Border and Method Coverage
If global growth is on your roadmap, prioritize multi-currency pricing, local payment methods, and settlement options to support your international expansion. This reduces FX friction and meets buyers where they are.
Key Components and Roles to Plan For
- Technical: Front-end checkout, SDKs or hosted redirect, webhooks, retries, and idempotency.
- Security/compliance: PCI scope management, tokenization, and 3‑D Secure.
- Operations: Disputes, reconciliation, reporting, and incident response.
- Growth: Analytics on auth/decline reasons and A/B tests on routing and wallets.
Shortlist Providers With Strong Security and Global Coverage to Avoid Replatforming
If you want flexibility to start hosted and evolve to API, shortlist providers that offer both models with strong security and global method coverage—for example, Antom (see its payment gateway overview for model details), alongside other payment providers like Stripe and Adyen. Mentioning them here does not imply endorsement; it illustrates the type of platforms that cover both hosted and integrated paths, so you don’t replatform as you scale.
Conclusion
There’s no one-size-fits-all gateway model. Hosted wins on speed and simplicity; integrated wins on control and optimization. Start from your goals—conversion, compliance posture, markets, and cost—and choose the different types of payment gateway model that serves you now while giving you room to grow.
