What Is a Payment Gateway?
A payment gateway is a service that allows businesses, whether they operate online or in physical stores, to accept credit card payments securely. For online stores, it also ensures that the payment process is safe by encrypting the customer’s financial information before sending it to the business owner’s account.
How Payment Gateways Work
To get a better grasp of how payment gateways work, let’s look at the key players involved:
Here is an overview of how a payment gateway operates when customers make online payments:
So, in simple terms, a payment gateway makes sure that when you buy something online and enter your payment details, your money is securely transferred from your bank to the seller’s bank. If everything checks out, the purchase is completed. If not, you’re asked to use a different payment method.
There are three types of payment gateways available: