Payment Gateways Explained

The backbone of any ecommerce website is the ability to receive and process payments safely, reliably, and securely. To do this, websites rely on software called Payment Gateways. What are Payment Gateways, and how do they make doing business online so effective in the age of online shopping, business-to-business marketing, and shopping cart ecommerce?

How Payment Gateways Work

Simply put, a payment gateway is a piece of software that allows two banks to communicate with one another. When a customer places an order on an e-commerce website, the acquiring bank – the bank taking the payment – uses the payment gateway’s software to acquiring payment information from the issuing bank – the bank of the customer – and sending back the acquiring banks response. That gateway and shopping cart software comes from companies like, which offer secure methods to process payments online.

This information includes the transaction amount in the specified currency as well as confirmation that the payment has been accepted, or notification that the payment has been declined. Certain payment gateway providers also offer additional services and payment options, helping to facilitate even smoother and more robust shopping and shopping cart services.

The Importance of Payment Gateways

Simply put, ecommerce would not be possible without payment gateways. The ability to seamlessly and reliably transfer funds from buyer to seller is key to making an online business work. Furthermore, payment gateways ensure security for transactions, using HTTPS protocols to keep transaction information protected from any fraudulent parties. Payment gateways allow real-time transactions and real shopping cart solutions for both buyers and sellers and are a crucial part of any ecommerce development plan.

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