Hosted Payment Fields vs Direct API: What Should Merchants Choose?

Digital commerce moves fast and the way you integrate your payment solution is far more than a technical detail. It's a decision that influences checkout performance, customer trust, and your ability to adapt to market changes. As businesses grow their online presence and expand into new markets, one common question arises: Should we use hosted payment fields or integrate payments via direct API?

This decision isn’t just about development effort. It touches on security compliance, user experience, and even long-term scalability. In this article, we’ll unpack the differences between hosted payment fields vs direct API, explore their advantages and trade-offs, and help you decide which option is best suited to your business stage and strategy.

Not sure which setup scales best for global growth? Keep reading for a practical comparison.

What Are Hosted Payment Fields?

Hosted Payment Fields (HPF) are secure, prebuilt payment input fields provided and managed by your payment service provider (PSP) or payment orchestration platform. They are embedded directly into your checkout form, allowing customers to enter their card details without the sensitive data ever touching your servers.

The key benefit here is PCI DSS compliance scope reduction. Because the provider’s infrastructure handles the card data directly, your business falls into a much lighter compliance category, often only needing to complete the simplest PCI Self-Assessment Questionnaire (SAQ-A). This significantly reduces both the cost and complexity of meeting security standards.

Hosted payment fields are also typically faster to integrate, since much of the heavy lifting is handled by the PSP. The provider maintains the fields, applies ongoing security updates, and ensures compatibility across browsers and devices. However, this convenience comes at the cost of less granular control over the checkout design. While most hosted solutions allow for some styling, the customisation options are not as limitless as with a fully custom-built payment form.

What Is a Direct API Integration?

A Direct API integration takes a very different approach. Here, your checkout form collects the cardholder’s information directly on your site, and your system sends it to the PSP through an API call, often via your own backend. This method gives you complete control over the user experience. Every pixel, every interaction, every animation can be designed to match your brand perfectly.

But that flexibility comes with responsibility. Because sensitive payment data passes through your servers, your business takes on the highest level of PCI compliance burden (SAQ-D) and assumes responsibility for securing your systems against potential breaches. This means investing in strong encryption, secure infrastructure, ongoing monitoring, and annual PCI audits, which can be resource-intensive.

Direct API integrations are typically slower to implement, requiring experienced developers and security experts. Yet for merchants who have those resources, the payoff is a highly optimised, fully branded checkout flow that can be tailored to meet unique needs, such as loyalty program integration, dynamic pricing, or custom fraud prevention logic.

Speed of Integration

If speed to market is a critical factor, hosted payment fields have a clear advantage. Since the PSP provides the code for embedding the payment inputs, the development work is minimal. Merchants can often go live within days or weeks, making HPF a practical choice for new product launches, market expansions, or seasonal campaigns.

Direct API integrations, by contrast, involve building the entire checkout form, validating and transmitting sensitive data securely, and ensuring the infrastructure is PCI-compliant. This process can take weeks or months, depending on complexity, making it more suitable for businesses with established timelines and dedicated technical resources.

PCI Compliance and Security

The difference in PCI compliance requirements is one of the most significant distinctions between hosted payment fields vs direct API. With HPF, your environment never handles raw card data, which dramatically reduces your exposure to compliance risks and simplifies certification. Your PSP bears most of the security responsibility, continuously updating its systems to stay ahead of threats.

With direct API, the opposite is true. You control the checkout and data handling, but you also shoulder full compliance obligations. This can be manageable for large enterprises with in-house security teams, but it’s often a costly and complex undertaking for small or mid-sized businesses.

Control Over User Experience

Hosted payment fields offer moderate control over your checkout design. Many PSPs allow merchants to style the input fields to match brand colors and fonts, but the core functionality and behavior are dictated by the provider. For many businesses, this is a reasonable trade-off, since the priority is a secure, functional, and fast checkout process.

Direct API, however, provides complete freedom to design and optimise the payment experience. This flexibility can be especially valuable for companies operating in highly competitive markets, where subtle changes to the checkout process can significantly influence conversion rates. Businesses with strong UX and engineering capabilities often leverage direct API integrations to create unique, brand-specific checkout flows that stand out from the competition.

Maintenance and Scalability

One often-overlooked consideration is the long-term maintenance of your payment integration. With HPF, the PSP handles updates, security patches, and compatibility fixes all without requiring your developers to touch the code. This means fewer ongoing costs and fewer operational headaches.

Direct API integrations require your team to maintain and update the payment form codebase. Any regulatory changes, browser updates, or new security requirements will need to be implemented by your developers. Over time, this can become a significant operational burden.

From a scalability perspective, hosted payment fields also pair well with payment orchestration platforms, making it easier to add or switch PSPs without major code rewrites. Direct API integrations are often more tightly coupled to a specific PSP, meaning that switching providers could involve substantial redevelopment work.

When to Choose Hosted Payment Fields

Choose hosted payment fields if you:

• Need to launch quickly.
  
  
• Want to minimise PCI compliance burden.
  
  
• Have limited development resources.
  
  
• Plan to work with multiple PSPs through a payment orchestration setup.
  
  
• Value operational simplicity over full customisation.
  

When to Choose Direct API

Choose direct API if you:

• Have strong in-house technical and security capabilities.
  
  
• Need complete control over the checkout UX.
  
  
• Are willing to take on full PCI compliance responsibility.
  
  
• Want to build highly customised payment flows that go beyond standard hosted options.
  

The Payment Orchestration Perspective

In the context of payment orchestration, the choice between hosted payment fields vs direct API takes on added importance. Hosted fields make it far easier to plug into multiple PSPs and switch providers without re-architecting your checkout. Direct API may offer deeper integration with specific PSP features, but could increase the complexity and cost of switching providers later.

Hosted Payment Fields vs Direct API: Which Is Right for Your Business?

For most growing merchants, especially those entering new markets or experimenting with multiple payment providers, hosted payment fields strike the right balance between speed, security, and flexibility. For mature enterprises with sophisticated in-house capabilities, direct API remains a powerful option for delivering a fully bespoke payment experience.

Either way, align your choice with your long-term payment strategy. The integration method you choose today can shape your ability to innovate, expand, and adapt tomorrow.

Learn more about integrating payments with Finera.