Gateway (Payment Gateway)

A payment gateway is a secure online service that authorises and routes card transactions between a merchant’s website or virtual terminal and their acquiring bank.

It acts as the digital equivalent of a card terminal, encrypting sensitive card data, verifying transaction details, and ensuring compliance with security standards like PCI DSS. The gateway connects to the card schemes (e.g. Visa, Mastercard) to approve or decline payments in real time.

Some gateways also offer fraud screening, recurring billing, and tokenisation features for safer and smoother customer payments.

Example:

An online retailer uses Stripe as its payment gateway. When a customer enters their card details at checkout, the gateway securely sends the information to the acquirer for authorisation and returns an approval message to complete the sale.

Used in:

E-commerce, virtual terminals, recurring payments, and online transaction processing.