Building a complete online payment gateway like Paypal

Question

So this question isn t about integrating an existing payment gateway into my site  This is more of a architectural question   I want to build a system similar to Paypal  Now I understand that Paypal offers a lot of features under the roof and I can t implement all of them at once  I want to implement the core functionality of Paypal and other such services   So my question is  rather discussion is  around how would one go about building such a system  Some points to discuss    Handle payments through existing banks  I am guessing that I would need access to local bank protocols to get this  Allow users to securely store and process their payments How does Paypal handle the transactions    Thoughts

User · Answer

Big task  chances are you shouldn t reinvent the wheel rather using an existing wheel  such as paypal    However  if you insist on continuing   Start small  you can use a credit card processing facility  Moneris  Authorize NET  to process credit cards  Most providers have an API you can use   Be wary that you may need to use different providers depending on the card type  Discover  Visa  Amex  Mastercard  and Country  USA  Canada  UK    So build it so that you can communicate with multiple credit card processing APIs   Security is essential if you are storing credit cards and payment details   Ensure that you are encrypting things properly   Again  don t reinvent the wheel   You are better off using an existing provider and focussing your development attention on solving an problem that can t easily be purchase

User · Answer

What you re talking about is becoming a payment service provider  I have been there and done that  It was a lot easier about 10 years ago than it is now  but if you have a phenomenal amount of time  money and patience available  it is still possible   You will need to contact an acquiring bank   You didnt say what region of the world you are in  but by this I dont mean a local bank branch  Each major bank will generally have a separate card acquiring arm  So here in the UK we have  eg  Natwest bank  which uses Streamline  or Worldpay  as its acquiring arm  In total even though we have scores of major banks  they all end up using one of five or so card acquirers   Happily  all UK card acquirers use a standard protocol for communication of authorisation requests  and end of day settlement   You will find minor quirks where some acquiring banks support some features and have slightly different syntax  but the differences are fairly minor  The UK standards are published by the Association for Payment Clearing Services  APACS   which is now known as the UKPA   The standards are still commonly referred to as APACS 30  authorization  and APACS 29  settlement   but are now formally known as APACS 70  books 1 through 7     Although the APACS standard is widely supported across the UK  Amex and Discover accept messages in this format too  it is not used in other countries - each country has it s own - for example  Carte Bancaire in France  CartaSi in Italy  Sistema 4B in Spain  Dankort in Denmark etc  An effort is under way to unify the protocols across Europe - see EPAS org      Communicating with the acquiring bank can be done a number of ways  Again though  it will depend on your region  In the UK  and most of Europe  we have one communications gateway that provides connectivity to all the major acquirers  they are called TNS and there are dozens of ways of communicating through them to the acquiring bank  from dialup 9600 baud modems  ISDN  HTTPS  VPN or dedicated line   Ultimately the authorisation request will be converted to X25 protocol  which is the protocol used by these acquiring banks when communicating with each other   In summary then  it all depends on your region    Contact a major bank and try to get through to their card acquiring arm  Explain that you re setting up as a payment service provider  and request details on comms format for authorization requests and end of day settlement files Set up a test merchant account and develop auth settlement software and go through the accreditation process  Most acquirers help you through this process for free  but when you want to register as an accredited PSP some will request a fee  you will need to comply with some regulations too  for example you may need to register as a payment institution   Once you are registered and accredited you ll then be able to accept customers and set up merchant accounts on behalf of the bank s you re accredited against  bearing in mind that each acquirer will generally support multiple banks    Rinse and repeat with other acquirers as you see necessary   Beyond that you have lots of other issues  mainly dealing with PCI-DSS  Thats a whole other topic and there are already some q amp a s on this site regarding that  Like I say  its a phenomenal undertaking - most likely a multi-year project even for a reasonably sized team  but its certainly possible

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