What is a payment gateway?
A payment gateway authorizes transactions, securely encrypts them, and submits them for processing. In the case of a direct-debit or electronic check transaction, a funds request is sent to the payers bank and if sufficient funds are available, the funds are deposited into the payee’s bank account. For credit card transactions, an authorization request is sent to the card-issuing bank. The transaction is then submitted to the credit card processor who deposits the funds into the merchant’s checking account.
A payment gateway is a complex system of computer technologies and processes that allow merchants to electronically submit payment transactions to the payment processing networks (i.e., the Credit Card Interchange and the Automated Clearing House Network) via the Internet. More specifically, payment gateways provide the necessary Internet infrastructure that enables merchants to accept credit card and electronic check payments from Web sites.
