A payment gateway is a technology used in e-commerce that facilitates the transfer of payment information between a customer’s web browser and the merchant’s website. It essentially acts as a bridge between the customer, the merchant, and the financial institutions involved in the transaction.
When a customer makes a purchase online, the payment gateway securely captures the payment details (such as credit card information or bank account details), encrypts them to ensure security, and forwards them to the payment processor. The payment processor then verifies the transaction with the customer’s bank or credit card issuer to ensure that the funds are available and that the transaction is legitimate. Once verified, the payment processor sends an approval or decline message back to the payment gateway, which then communicates the status of the transaction to the merchant and the customer.
