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What is Payment Gateway, and Why It Matters to Your Online Business

If your business has anything to do with e-commerce, your have probably heard of payment gateways. But do you know what they are and how they work? And why are they necessary to profit from your online shop? If you have a lot of questions about what payment gateways are, the following information will help you.

Payment Gateway

A payment gateway is a merchant service that payment service providers use to process payments for online purchases that originate on a merchant’s website. The payment gateway authorizes credit card or direct payments processing for e-businesses, online retailers, bricks and clicks and traditional brick and mortar businesses. Essentially, it acts as an interface between the merchant’s website and a payment-processing bank, known as an acquirer. When the customer makes a purchase on your website – connected to a payment gateway – the gateway performs a variety of tasks to complete the transaction.

Payment Gateway Process

1. When the customer wants to place an order via your website, they choose to checkout or pay. This action redirects them to the payment page, where they can then enter in their credit card details.

2. The card information is then securely collected and passed on to the payment application. Or, the payment page is generated by the payment gateway application itself, where information is then collected. Either way, the transaction details are collected and safely stored on the payment gateway’s secure servers.

3. The payment gateway then processes the transaction and sends the information to the issuing bank for approval.

4.  Once confirmed by the card schemes, the payment gateway sends the approved transaction back to the merchant’s web site. The merchant can then inform the customer that the purchase had been successfully completed.

While there are many other tasks the payment gateway performs, these are the steps that take place behind the scenes when a credit card payment is processed. Believe it or not, this process takes place in 3 seconds!

Payment Gateway Features

Throughout the process, payment gateways add a lot of value. The following are just a few of their key features:

  • A payment gateway is the most common way for a merchant to connect to the payment system.
  • Compared to the advantages they offer gateway transaction fees are very small. Some of the biggest benefits of using payment gateways include: helping merchants connect to an acquirer, manage their business and control the risks associated with accepting online payments.
  • The best payment gateways will offer the merchant customizable reporting options, which help the merchant to better manage their business. It will also provide merchants with access to connect and to able to process many different payment methods (methods the merchant might not yet be able to offer.)
  • Some payment gateways also provide tools to automatically screen orders for fraud and calculate tax in real time.

Where to Find Secure Payment Gateways

Are you searching for safe payment gateway options to take your business to the next level? Many merchants looking for secure credit card processing at the lowest possible rates have turned to for multiple payment gateway options. EMB has been voted the #1 high risk processor in the US and is rated A+ by the BBB. In partnership with Verifi and Ethoca, EMB offers unmatched chargeback prevention and protection services in the industry.

With EMB, your business can take advantage of a full support platform, and a wide range of payment gateways, business funding, POS and check processing solutions. If you want to learn more or apply for a high-risk payment gateway, contact our team today.