what is payment gateway

A payment gateway is a technology used by merchants to accept debit or credit card purchases from customers. It is a merchant service provided by an e-commerce application service provider that authorizes credit card or direct payments processing for e-businesses, online retailers, bricks and clicks, or traditional brick and mortar. Payment gateways are services that process your business’ card transactions. They are an asset to your business because they ensure safe and smooth transactions, and reduce losses associated with late payments. Payment gateways are interfaces used to collect consumer payment information. They are not directly involved in the money flow; typically, it is a web server to which a merchants website or POS system is connected. Payment gateways are distinct from payment processors, which use customer information to collect payments on behalf of the merchant. Payment gateways can be provided by a bank to its customers, but can also be provided by a specialized financial service provider as a separate service, such as a payment service provider.