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Payment Gateway

A payment gateway is a payment service technology that helps read and transfer payment information from a customer to a merchant’s bank account, facilitating the quick processing of online and mobile payments. It creates a secure pathway between a merchant and the customer to transfer payments securely.

How does it work? A payment gateway primarily focuses on securing the sensitive payment information shared by the user by encrypting data like the card and bank details.

Here are the basic steps involved in payment gateway processing:

  • A customer places an order online and presses the checkout button
  • The website takes the customer to a payment gateway where they enter the card details
  • The payment gateway then takes the customer to the page of the issuing bank or a 3D secure page to authorize the transaction
  • After the authorization, the bank checks whether the customer has sufficient funds in the account to complete the transaction
  • The bank settles the money with the payment gateway, which further settles it with the merchant
  • Once the process is complete, the customer gets an order confirmation message

Examples of payment gateways: PayPal, Stripe, CCAvenue, Amazon Pay, Apple Pay, Square, and Authorize.net.

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