What is a payment gateway?
A payment gateway is a technology layer which securely captures payment details from a customer and transmits them to the relevant payment processor or acquiring bank. It acts as the entry point for payment data during a transaction.
How does a payment gateway work?
When a customer enters their payment details, the gateway encrypts the data and sends it to the processor or acquirer. The gateway then receives the authorisation response and passes it back to the merchant’s system, allowing the transaction to complete or fail.
Why are payment gateways important?
They ensure secure transmission of sensitive data and enable merchants to accept payments online or through integrated systems. Without a gateway, merchants would need to handle raw card data themselves, which increases risk and compliance burden.
What features do modern gateways provide?
Modern gateways often include fraud screening, tokenization, recurring billing support, reporting tools, and support for multiple payment methods. Some also offer routing logic and optimisation features to improve approval rates.
How do gateways differ from payment processors?
Gateways focus on capturing and transmitting data, while processors handle the actual movement of funds and communication with issuing banks. Many providers combine both roles into a single service.