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What are payment gateways? How does it work? – Technology Updates

What are payment gateways? (What is Payment Gateway)

Payment Gateway is a service through which customers in any e-commerce business pay their online store with a credit card or David Card. In which the money sent online by the customer directly reaches the store owner’s bank account. Payment Gateway is the service that sends all the transactions of your credit card to your credit card processor. It also sends you a message from your credit card processor. Sends to let you know that the transition has taken place.

Payment Gateway is an e-commerce software that authorizes payments for online merchants, e-businesses or electronic businesses, and mortar businesses. The payment gateway is the third party between merchants and customers who securely takes money from customers and sends it to the merchant’s bank account.

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The payment gateway is the last step of the sales process on the e-commerce website. Without this, you cannot safely charge your customers while purchasing items from your website.

A payment gateway facilitates payment transitions by transferring information between a payment portal (such as a website, mobile phone or interactive voice response service) and a front-end processor or an acquiring bank.

In simple steps, the payment gateway:

  • Deals with a credit card.
  • Encrypts transaction information.
  • Routes it to the credit card processor and then;
  • Anybody accepts or rejects the information.

This way, your customer immediately gets to know if their credit card is approved or not.

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How do payment gateways work? (How does Payment gateway Work)

As a customer, the payment gateway is simple and straightforward. You go to the eCommerce site, add the items you want to your cart and checkout. You enter your payment information and confirm your order. After this, within a few days, your luggage will come to your house.

Network security, A secure network should be your number one priority when looking for a payment gateway. Your customers should be able to believe that their financial information will be safe when shopping from your store. Watch for PCI-compliance, as this is important when accepting credit cards online.

The gateway process follows these steps.

  • The customer places his order and records his payment information.
  • If the order is through a website, the customer’s web browser encrypts the information sent to the merchant’s web server. And in other cases, this is done through the Secure Socket Layer (SSL).
  • It is an SSL encrypted connection from the merchant’s server site to the payment server hosted by the payment gateway.
  • The payment gateway sends the transaction information to the payment processor used by the acquiring bank of the merchant.
  • Payment Processor Forward Transaction Information to Card Association.
  • The card association receives the request, verifies the request and sends a response to the processor. This explains the success or failure of the request as well as the reason.
  • The payment processor forwards this information to the payment gateway.
  • The payment gateway goes to the merchant website for this.
  • This process takes about 2-3 seconds to complete. The merchant then completes the order and the above process can be repeated.
  • At the end of the day, the payment gateway performs a process known as settling. During which it performs all your transitions simultaneously and sends the merchant to the acquiring bank in a single batch through the processor for the merchant’s settlement.
  • Payment gateways also record your transitions and allow you to view them using the payment gateway report features. This completes a single payment gateway process.

Best Payment Gateway Company in India


CCAvenue was launched in 2001 and has now become India’s oldest and best payment gateway. CCAvenue can send and take money to all types of banks without any hassle. Snapdeal, an Ecommerce Website, uses CCAvenue for transactions.


In today’s time, PayPal is a very good company with more than 200 million customers. PayPal is one of the very famous companies. With Paypal payment gateway service, we can easily send and receive payments and it is a worldwide company.

PayTm Payment Gateway

You will know that today the company has become a daily-use company in the PayTm payment gateway and the user’s trust in this company is very high. With PayTm payment gateway, you can do a large number of transactions and send and receive payments. As soon as the PayTm payment gateway was launched, over 1 million customers of Paytm payment gateway became on the same day, so that you can guess how popular payment gateway of India is today.

PayUmoney Payment Gateway

PayUMoney is also an online payment gateway that helps in sending and receiving money online. Many big companies like Goibibo, BookMyShow, Snapdeal, Travelyaari, etc. use PayUmoney. PayUmoney is also very safe like other companies.

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