A customer reaches checkout, enters payment details, and clicks Pay. What happens next depends heavily on how your payment gateway is integrated.
Some businesses redirect customers to a provider-hosted page. Others keep the payment experience inside their own checkout. Larger platforms may build directly against APIs or route payments across multiple providers.
Those are the differences that matter when comparing the types of payment gateways.
Some businesses redirect customers to a provider-hosted page. Others keep the payment experience inside their own checkout. Larger platforms may build directly against APIs or route payments across multiple providers.
Those are the differences that matter when comparing the types of payment gateways.
TL;DR
- The main payment gateway models are hosted checkout, embedded/hosted fields, and direct API/custom integration.
- There is no universal industry standard that defines exactly four gateway “types”; labels such as self-hosted and local-bank gateway often overlap with broader integration models.
- Hosted and embedded approaches can reduce how much card data your systems handle, but they do not remove PCI DSS responsibilities.
- Choose a gateway based on checkout control, payment methods, security scope, reliability, international coverage, settlement, and reconciliation.
What is a payment gateway?
A payment gateway securely captures and transmits payment information from checkout into the payment-processing flow.
Customer → gateway → acquirer/processor → card network → issuing bank → approval or decline
The issuing bank or relevant payment institution makes the authorisation decision. A broader payment provider may also handle onboarding, settlement, refunds, and reporting.
What are the main types of payment gateways?
There is no single official taxonomy, but most online payment integrations fall into three practical models.
| Gateway model | Checkout experience | Development effort | Merchant control |
|---|---|---|---|
| Hosted payment page | Customer moves to a provider-hosted payment page | Low | Lower |
| Embedded/hosted fields | Payment fields appear inside the merchant checkout | Moderate | High |
| Direct API/custom integration | Merchant builds more of the payment flow | High | Highest |
A fourth architecture worth understanding is multi-gateway or payment orchestration, where a business routes transactions across multiple providers.
1. Hosted payment gateway
A hosted gateway sends the customer to a payment page operated by the payment provider.
After the payment is completed or fails, the customer is returned to the merchant's website or app.
Best for
- businesses that want faster implementation
- teams with limited development resources
- payment links and simpler checkout flows
Trade-off
The merchant has less control over the payment-page experience and transition.
2. Embedded or hosted-fields gateway
Here, the checkout remains within the merchant's page, but sensitive payment fields can be served by the payment provider through an iframe or another provider-controlled component.
Best for
- D2C and e-commerce businesses
- SaaS checkout
- merchants that want greater UX control without building the entire payment layer
PCI DSS scope still depends on the exact implementation. PCI SSC makes clear that embedded payment pages and redirects can qualify for reduced-scope assessment only when the applicable eligibility criteria are met.
3. Direct API or custom gateway integration
A direct API integration gives the merchant's development team much more control over the payment experience and transaction logic.
It can support custom checkout, saved-payment flows, subscription logic, advanced errors, routing rules, and deeper platform integration. The trade-off is greater technical and security responsibility.
If merchant-controlled elements collect or process cardholder data, PCI DSS scope can increase significantly compared with a fully outsourced payment page.
What about a self-hosted payment gateway?
“Self-hosted gateway” is not a precise industry-standard category.
It often describes a merchant-created checkout that sends payment data to a provider through an API or direct-post flow, so it is closer to a custom/direct API integration.
The important question is not the marketing label. Ask:
Who creates the payment page? → Who receives the card data? → Does card data touch the merchant's systems?
Those answers determine the real technical and PCI DSS implications.
What is a local bank integration gateway?
Local-bank integrations let customers pay through a bank or domestic payment rail. This is better understood as a payment method or banking integration than a universal gateway type.
Hosted vs embedded vs API payment gateway
| Factor | Hosted | Embedded | Direct API |
|---|---|---|---|
| Setup effort | Lowest | Medium | Highest |
| Checkout control | Lower | High | Highest |
| PCI scope | Can be reduced | Can be reduced depending on implementation | Often broader |
| Customisation | Limited | Strong | Extensive |
| Maintenance | Lower | Moderate | Higher |
| Good fit | Fast launch | Growing e-commerce/SaaS | Complex platforms |
How do you choose the right payment gateway?
Check payment methods, international coverage, Payment Success Rate, PCI DSS scope, reliability, settlement, reconciliation, integration quality, and total pricing.
What if one payment gateway is not enough?
High-volume businesses sometimes use payment orchestration or multiple gateways.
An orchestration layer can route transactions based on issuer, geography, method, performance, or availability. It can improve resilience and payment success, but adds technical and reconciliation complexity.
How PayGlocal handles international checkout
PayGlocal is built for Indian businesses accepting international payments.
Its gateway supports international cards, Apple Pay, Google Pay, local payment methods, intelligent routing, retries, localised checkout, 3DS optimisation, fraud screening, payment links, recurring payments, and major e-commerce/API integrations.
PayGlocal currently operates across 180+ countries and advertises payment success rates of up to 96% on international payments.
It is RBI-authorised as a Payment Aggregator – Cross Border – Inward & Outward (PA-CB-I&O) and an Online Payment Aggregator (PA-O).