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FinTech
What is Payment Gateway?
Quick answer
A service that securely captures and transmits payment details from a customer to the banks and networks that approve the transaction.
Payment Gateway, explained
When you pay on a website, the payment gateway is the technology between the checkout page and the financial system. It encrypts card or bank details, sends them for authorization to the card network and issuing bank, and returns an approval or decline, usually within seconds.
Many gateways also act as payment processors and offer fraud screening, recurring billing for subscriptions, refunds, multiple currencies, and local payment methods such as wallets and UPI. They help merchants meet security standards like PCI DSS by handling sensitive card data so the merchant's own servers never store it. Developers integrate gateways through APIs, hosted payment pages, or plugins for e-commerce platforms. Fees are typically charged per transaction.
Related terms
Buy Now, Pay Later
A short-term financing option, known as BNPL, that lets shoppers split a purchase into installments, often interest-free if paid on time.
ChargebackA reversal of a card payment initiated by the cardholder's bank, usually after the customer disputes a charge.
FinTechFinancial technology: software and services that improve or automate financial services such as payments, lending, and investing.
Interchange FeeA fee paid by the merchant's bank to the cardholder's bank on each card transaction, forming a large part of card processing costs.
PCI DSSThe Payment Card Industry Data Security Standard, a set of security requirements for any organization that stores, processes, or transmits card data.
Payment ProcessorA company that handles the technical and financial steps of card and digital payments between a merchant, card networks, and banks.
TokenizationReplacing sensitive data with non-sensitive substitutes called tokens, or breaking text into tokens that AI models can process.
WebhookAn automated message one application sends to another via an HTTP request when a specific event happens.
Guides that mention Payment Gateway
How to Accept Payments on Your Website: Gateways, Processors, Wallets and PCI Basics
A plain-English guide to accepting payments on your website: gateways vs processors, hosted checkout, digital wallets, fees and the PCI basics small sites need.