Payment gateway
- The service that securely passes a customer’s card details from your website to the bank and returns an answer on whether the payment succeeded.
- It is the online equivalent of the card machine on a shop counter. Well-known gateways include Stripe, PayPal, Worldpay and Opayo (formerly SagePay). Most let customers pay on a secure page or panel that the gateway hosts, which keeps card numbers off your own server and makes your compliance duties much lighter.
Example The payment gateway declined the card and the shop showed a polite error message.
- 1CustomerPays by card at your checkout
- 2Your shopSends the order to the gateway
- 3Payment gatewayEncrypts the card details and passes them on
- 4Acquiring bankBehind your merchant account
- 5Customer’s bankApproves or declines the payment
The answer comes back along the same route in a second or two, and your shop confirms or refuses the order.
How a card payment travels
When a customer clicks pay, the gateway encrypts the card details and passes them to the acquiring bank (the one behind your merchant account), which asks the customer’s own bank whether to approve the payment. The answer comes back within a second or two, and the gateway tells your website whether to confirm the order. Your shop never needs to see or store the full card number.
Hosted or embedded?
With a hosted gateway the customer pays on a page run by the provider and then returns to your shop. With an embedded one the payment form sits inside your own checkout, but the card details still travel straight to the provider. Hosted is the simplest option and keeps your PCI DSS duties lightest; embedded feels smoother. Both are common, and either can include 3D Secure.
What to compare
Look at the fees (usually a percentage plus a small fixed amount per transaction), how quickly money reaches your bank, which cards and wallets are supported (Apple Pay and Google Pay now matter), how refunds are handled, and whether a separate merchant account is needed. Beware of comparisons that ignore the fixed charge, which can matter more than the percentage on small orders.
A common question
Does the gateway take a cut of every sale? Yes, gateways charge for each transaction. We take no commission on your sales, but the gateway’s own fees always apply, so it is worth working out what they come to on your typical order.
See also Merchant account 3D Secure PCI DSS