Payments Gateway

May 2, 2025 blog

A Payment Gateway is a technology used by merchants to accept debit or credit card purchases from customers, typically online or via mobile apps.

 What a Payment Gateway Does:

  1. Encrypts Data: Secures sensitive information (like card details).

  2. Authorizes Transactions: Verifies if the customer has sufficient funds or credit.

  3. Transfers Funds: Communicates with the acquiring bank to initiate the actual transfer of money.

  4. Provides Confirmation: Sends a success or failure message to the merchant and customer.

 How It Works (Simplified):

  1. Customer enters card/payment info on the checkout page.

  2. Gateway encrypts and sends info to the acquiring bank.

  3. Acquirer forwards the request to the card network (e.g., Visa, Mastercard).

  4. Card network checks with the issuing bank (customer’s bank).

  5. Issuing bank approves or declines.

  6. Gateway relays result back to the merchant.