payment gateway

A payment gateway is an e-commerce application service provider that authorizes credit card payments for e-businesses (a plenty of e-commerce platforms like Magento, PrestaShop, Opencart, Shopify, etc.) and online retailers. Examples of such services are Paypal, eBay, 2Checkout, Worldpay, Authorize.net and many others.

A payment gateway provides the transfer of information between a payment portal (such as a website, mobile phone or interactive voice response service) and the Front End Processor or acquiring bank.

Many payment gateways also provide tools to automatically screen orders for fraud and calculate tax in real time prior to the authorization request being sent to the processor.

One should distinguish the payment gateway and a payment method, which is a type of standardized procedure for transferring the monetary amount for a purchase. Commonly used methods are not only the ones, proceeded via payment gateways, but also the cheque, cache on delivery and bank wire.