A payment gateway is a secure technology platform that processes and authorizes online transactions between customers and merchants. It acts as a digital bridge connecting the merchant’s website, payment processor, and financial institutions, ensuring safe and seamless transfer of payment data.
When a customer makes an online purchase using a debit card, credit card, or digital wallet, the payment gateway encrypts and transmits the transaction details to the acquiring bank for authorization. Once approved, the funds are transferred to the merchant’s account.
Payment gateways are essential for eCommerce platforms, subscription services, and mobile apps that accept online payments. They support multiple payment methods such as cards, UPI, net banking, and digital wallets.
Popular examples include Novalnet, Stripe, PayPal, Razorpay, Paytm, and Authorize.Net.
Key Features:
- Secure data encryption and fraud prevention
- Real-time payment authorization and processing
- Multi-currency and cross-border payment support
- Integration with websites, apps, and POS systems
- Detailed transaction and settlement reports
Benefits of Payment Gateway:
- Simplifies online payment collection
- Enhances customer trust through secure checkout
- Enables global transactions
- Reduces manual effort with automated payment processing
Use Case Example:
An online store uses Novalnet as its payment gateway to securely process credit card transactions from international customers during checkout.