paymentgateway

A payment gateway is a technology service that authorizes and processes payments for online and point-of-sale transactions by transmitting payment data between customers, merchants, and financial institutions. It serves as the interface between a merchant’s systems and the payment processor, acquiring bank, and issuing bank to determine whether a payment should be approved or declined. In a typical online transaction, a customer enters payment details; the gateway encrypts the data, may tokenize the card number, and securely forwards the information to the payment processor or acquiring bank for authorization. After receiving an approval or decline, the gateway relays the result to the merchant, and, if approved, the processor settles funds to the merchant’s account.

Gateways can be hosted (redirected to a provider’s checkout page) or API-based (direct integration into the merchant’s site or app). Some gateways also function as processors, while others are gateway-only and rely on a separate processor. Features commonly include support for multiple payment methods, fraud detection and risk scoring, tokenization, recurring billing, multi-currency processing, and strong customer authentication such as 3D Secure.

Security and compliance are central priorities, with PCI DSS requirements, TLS encryption, and ongoing risk controls. Performance considerations include latency, reliability, and handling refunds and chargebacks. Payment gateways are used across e-commerce, mobile apps, subscriptions, and in-store systems that process card-present or digital wallet payments. Examples of widely used gateways include Stripe, PayPal, Authorize.Net, and Adyen.