A payment gateway is a technology service that captures payment details at checkout, encrypts them, sends them to the payment processor and card networks for approval, and returns the result to the merchant.
Why it matters
It is the link between a store and the banking system. If the gateway is slow or unavailable, customers cannot pay even though the rest of the site works. Gateways also handle security requirements so merchants do not store raw card data.
Example
A customer enters card details on a checkout page. The gateway sends an authorization request, receives an approved or declined response in about a few seconds and the store shows a confirmation. Funds settle to the merchant later.
Common mistakes
- Assuming a gateway is the same as a merchant account; they are separate parts of the chain.
- Storing card numbers on your own server.
- Not monitoring checkout availability, so payment failures go unnoticed.
Related
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