A payment gateway is a service that connects your eCommerce website to the financial network, allowing you to accept credit cards, debit cards, and other forms of online payments. In fact, it’s possible that you’ve used a payment gateway in some way today without even knowing it (such as when purchasing something on Amazon). Payment gateways are the lifeblood of any online business.
What is a payment gateway?
A payment gateway is a software or hardware device that lets buyers pay for goods and services online. It’s an essential part of any e-commerce site, serving as the bridge between your website and your bank.
Payment Gateways Explained
Payment gateways are the backbone of your online business. They connect you with your customers, providing the security and payment processing that makes it possible for them to pay you.
Payment gateways provide an interface between buyers, who want to make purchases from merchants using their cards, and the banks that issue those cards. They also manage risk by ensuring that transactions take place securely under PCI compliance standards (more about this later).
Types of Payment Gateways
A payment gateway is a service that allows merchants to accept credit card payments online. Payment gateways are used by online merchants, eCommerce websites, and online businesses in general. Basically, it’s the technology behind the scenes of your favorite shopping sites.
The most common type of payment gateway is an “authorize only” (AO) gateway–this means that it authorizes transactions but does not capture them until a physical check or cashier’s check has been received by your business and deposited into your bank account. You can also choose from other types:
- Capture only – This allows you to capture funds immediately after they’ve been processed through the AO processor but does not authorize them until later on