How can you build a mobile app that accepts payments? Whether it’s a travel app or a fashion mobile commerce application, you need to somehow accept electronic payments for physical goods your customers want to purchase. Sales from mobile shopping are projected to continue rising, according to Forrester research. It’s critical to have a payment processing gateway that runs smoothly within your mobile app.
We are not going to talk about in-app purchases of digital goods and how to implement them. These kinds of purchases on iOS and Android devices are performed solely by Apple’s AppStore or Google’s Play services. Neither of the app stores let individual applications sell digital goods through third-party services. But once your app sells something ‘real’ — a physical commodity — then you are free to choose whatever payment system you like, thereby avoiding Google’s and/or Apple’s 30 percent share from every purchase made in your app. Let’s talk about some mobile payment integration solutions that can let your mobile app to process payments for physical goods.
Direct mobile credit card payment integration with a gateway API
There are a large number of payment gateways that allow you to process credit card transaction data through their APIs. This seems at first glance like a simple solution. But integrating a gateway’s APIs will place the responsibility for the security of credit card data on your shoulders, since that data now passes through your mobile app.
Furthermore, not all payment gateways support an authenticated tokenization process, which is required when accepting payments from a mobile app. Ideally, when mobile payment integration is implemented in your app, the API call should hand back a token from your server’s secure authenticated environment. This token represents the submitted card, and can be used to execute actual transactions. However, if this tokenization functionality of is not provided by your Gateway API, you will have to handle the process yourself.
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There’s another way you can stay in Payment Card Industry (PCI) compliance without too much effort. Major gateways or payment systems such as Stripe and PayPal’s Braintree offer robust native mobile libraries for Android and iOS and ease PCI compliance by sending encrypted credit card data as a token. Thus, you can easily integrate mobile payment capabilities while avoiding most PCI compliance concerns because sensitive credit card data skips your servers.
Braintree as well as Stripe charges users in the US 2.9% + $0.30, regardless of whether the card used is international, business, or American Express.
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The first and foremost requirement for any service that collects payments is adherence to Payment Card Industry compliance standards. For example, services included in The MasterCard Compliant Service Provider List and Visa Global Registry of service providers are PCI-DSS (Data Security Standard) compliant. Both Stripe and Braintree are certified as a PCI Level 1 Service Provider, the most stringent level of certification available.
The process of becoming PCI certified takes months of work — and you honestly don’t need that headache if your app is going to simply pass the card data to a gateway for long-term storage. But at the same time anyone who accepts credit card payments — even those with mobile payment system integration — needs to comply with PCI-DSS rules.
Braintree and Stripe do much of the heavy lifting for you. With the help of Braintree.js / Stripe.js integration you can store your customers’ payment information in a secure vault and then transmit that information directly to a payment system’s servers. Also, you will have to fill out a security quality questionnaire. Read more about how this works for Stripe and Braintree. Now let’s look at the major payment gateway solutions for mobile apps.
Stripe vs. Braintree
After eBay subsidiary PayPal bought Braintree for as much as $800M, the talk as to whether Braintree is as cool as Stripe became even more engrossing. Stripe has been doing a good job winning most of the new business in the app world. What’s more, Stripe has even taken some big clients away from Braintree, such as ride-sharing apps Lyft and Sidecar. (By the way, the designer’s abode Dribbble also works with Stripe.)
Perhaps more significantly, Facebook has been testing their “buy” button powered by Stripe. This button allows Facebook users to purchase goods that are featured in ads or posts on the social network. Stripe is also Twitter’s only payment partner getting ready to bring Twitter’s e-commerce initiative to the masses. “Buy” buttons within tweets that let users shop for stuff without leaving their Twitter feeds are in the near future.
At the same time, Braintree also has partnerships with Facebook for various features. They’ve teamed up with Facebook to support a new FbStart program that offers free tools and services to help startups build and grow their mobile apps.
Braintree also managed to keep Uber and Airbnb, the growth of which might be the reason why Braintree’s payment volume is growing so fast.
Braintree is changing rapidly, as are the number of mobile shoppers in the world. So when our developers recently went to Braintree’s Venmo Touch page — which they used to visit when developing an event planner app that offered event ticket purchases — they saw a note saying “This is a deprecated product.” Wait...does this mean that mobile app payment integration is no longer available? Nope!
PayPal has taken some outstanding measures to make its product super fancy. So now Braintree has launched a new foundation for accepting payments and called it Braintree v.zero SDK. This new SDK allows faster mobile payment integration and some great features such as a drop-in UI that’s customizable across platforms, giving app developers full control of the user experience and the look of the “Pay with PayPal” button. This new Pay with PayPal feature means a lot for merchants and us developers, as we don’t need to implement a separate PayPal integration for your mobile app anymore.
Better still, Braintree has announced One Touch™ mobile payments with PayPal. This is pretty disruptive, as the industry hasn’t had a single touch payment experience before. Braintree has enabled this experience on iOS and it’s in public beta on Android now.
[Stripe's Relay, a single way to pay within mobile apps. Source: TheVerge]
Bill Ready, the CEO at Braintree, in an interview with TechCrunch, says that the reason for introducing a single touch payment solution is that mobile conversion rates are still far off from where they are on desktop sites. Ready believes this is because a user finds it hard to enter or re-enter credit card information on mobile devices.
Single touch payments eliminate the need for usernames or passwords.
In order to make it possible for your customers to use One Touch, they need to have PayPal and Venmo apps installed on their devices. Once the apps are installed and a user has logged in, they can then make payments without any additional hassle. This feature is currently available only for US-based merchants.
Another feature in Braintree’s innovative package is bitcoin mobile app payment integration. Through partnership with Coinbase, in the coming months Braintree’s v.zero SDK is going to provide developers and merchants with the ability to add bitcoin to the existing payment methods so that a user can pay in bitcoin with their Coinbase wallet.
Stripe launched in 2011 as a developer-friendly payment system that took care of transactions and ensured their safety. Stripe supports multiple programming languages on the backend and is easy to deploy. The API makes it easy for clients to store cards, enable subscriptions, and direct payouts to a bank account. Mobile app developers can use Stripe’s functionality Stripe and retain full control over the UI. This full-stack payment platform lets merchants accept instant payments in 139 currencies.
According to Pando, Stripe is far and away the simplest solution for payments, and gives companies control over various aspects of the payment process. We’ve had some experience with Stripe and fully support this assessment. Stripe doesn’t cause any difficulties for developers, nor does it run into issues when processing transactions.
With new investment, the Collison brothers — the founders of Stripe — are planning to expand their API for payments processing by building an infrastructure around mobile, checkout, fraud and more.
Stripe payment solutions also involve a Stripe Connect service that helps users get paid within the app and lets you get secure access to your user’s payment and business data. With this access you can build analytics services and accounting tools on top of the data in Stripe accounts.
Card-present transactions: PayPal Here and Square vs. Stripe and Braintree
Stripe and Braintree can be used for card-not-present transactions, but services such as Square and PayPal Here offer solutions to accept mobile payments from consumers at a point-of-sale.
These POS systems can be a good solution for a local marketplace or store. Square offers two products, Square Stand and Square Mobile Card Reader (similar to the PayPal Here reader), which plugs into the standard headset jack of your smartphone or tablet and allows to take payments by swiping credit cards for a transaction fee generally between 2.5%–3%. You don’t have to worry about PCI compliance, as it’s the payment system’s responsibility, not yours. Funds will get deposited to your account in a day or two.
Stripe and Square are often talked about together in the media not because they are similar (their business models are quite different), but because they are the prime examples of innovation in the payments industry and both have billion dollar valuations.
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European payment systems
If you’re European, you may not be able to take advantage of some of the fancy features both Stripe and Braintree offer. But there are other services and mobile payment systems available for local European markets.
The particulars of processing payments in Europe are a bit different than in the US market. Therefore, any company planning to work with payments in Europe needs to learn how to handle a greater number of international transactions and different sales taxes. Credit card use in Germany, for example, is one of the lowest anywhere in the European Union.
Additionally, European are used to using chip-and-pin credit and debit cards to make transactions, which means you have to enter a personal identification number instead of signing for a purchase, which is still more common for the United States. For instance, Square’s solution does not yet allow users to use the chip-and-pin function on their cards and is currently building a Square Reader for chip cards that can accept both magnetic-stripe cards and chip cards.
“The U.S. is fundamentally a different market. You really need to have local expertise to succeed in Europe,” said Alston Zecha, the co-founder of payleven.
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As you can see, there are many ways to accept payments in your mobile app. Look around to find the best solution for your particular app, and don’t hesitate to get in touch with us here at Yalantis if you have any questions!