What is Payment Gateway

Payment Gateway


A payment gateway is a service that automates the payment transaction between the buyer and the seller. It is usually a third-party service that is actually a computer processing system that verifies and accepts or rejects credit card transactions on behalf of the merchant over secure internet connections.

What is a payment gateway for?

The payment gateway is the infrastructure that allows a merchant to accept credit cards and other forms of electronic payment. When referring to payment gateways used for internet transactions, they can also be called IP payment gateways.

Payment gateways authorize credit card payments in order to support point-of-sale systems. The purchase data goes to the payment gateway and the credit card information is encrypted for delivery. Payment gateways can also help verify payment at the bank.

Payment gateway services

Payment gateway services may be subscription-based or may charge a fee for each transaction. In general, they help traders to serve customers more effectively by providing an intermediary service of financial information, something very sensitive and important to protect during these operations. For example, a payment gateway is important for any e-commerce store but it could also be used at an event such as a concert, where tickets are purchased outdoors away from point-of-sale infrastructure.

Payment gateways play a critical role in the process of e-commerce transactions, as they authorize payment between merchants and customers. The most popular payment gateways on websites include PayPal/Braintree, Stripe, and Square.

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