Merchant Account Payment Gateway Explained:
What is a Payment Gateway? A Payment Gateway is a “behind the scenes” service in the credit card processing industry and is required for merchants wishing to accept online credit card payments or payments through a virtual terminal.
A payment gateway acts as a “middle man” between front-end systems like online shopping carts or virtual terminals, and the banks that process the transaction. The Payment Gateway is responsible for receiving the payment data from the front-end system, encrypting it, sending it to the bank for processing, receiving the bank’s authorization, and then communicating the authorization information back to the front-end.
Most payment gateways are hosted by the providers of the technology on their secure servers. Therefore, most merchants will not need to install additional software on their own servers to run a payment gateway.
Payment gateways can be standalone systems designed to be integrated with other third-party systems, or they can come bundled with their own shopping carts and virtual terminals. Merchants wishing to use a virtual terminal or accept online transactions should first speak with their merchant account provider to get recommendations on compatible payment gateways. Setting up payment gateways is a common practice among merchant account providers and often requires little to no involvement from the merchant, other than signing up for the service and paying fees.
Payment Gateway Video Explanation
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