In the world today, the internet is used on a massive scale to purchase products and services from various online retailers. In order for online orders to take place, payment must pass from the customer to the retailer. A service was introduced to facilitate this need referred to as the payment gateway.

The reason we require payment gateways is to allow the transfer of money from one person or company to another. They are essential to ensure that personal payment details are kept safe and secure. If we gave card payment details to every site to process manually, we would find that online fraud would be a lot more prominent than it is today. There are many online stores which do take payment details directly, but these must ensure that they are PCI Compliant and are secured using an SSL certificate.

The majority of sites will pass the customer to the payment gateway site to make payment. Once verified and completed, the customer will then be passed back to the referring site to acknowledge a confirmation of payment. Payment gateways not only protect the customer, they also protect the retailer. Before a payment gateway processes payment details, a number of checks will be made to ensure the details given are valid and owned by the customer.

There are now a large number of payment gateway providers available on the internet. Some simply take your debit or credit card details to make payment such as Protx, World Pay and 2Checkout, whilst others give the option to create an account and store your card information. This account can then be used in future to make payments rather than giving card details each time. Providers that use this method include Paypal, NOCHEX, PPPay and many more.

When a transaction is made using a payment gateway, the retailer is usually charged a small processing fee for having received payment. Most payment gateways are free to join and setup making it very easy for anyone to setup an online shop. This is one of the reasons why e-commerce has taken off so quickly. Without the simplicity and low cost of setting up a payment gateway, the number of online retailers would be on a much smaller scale than today’s standards.

One of the other features of some payment gateways is the ability to setup subscriptions. This allows a provider to grant access to a service based on a continual payment. The payment gateway holds the card information of a customer and will make payment based on the subscription terms, whether that be daily, weekly, monthly or yearly.

Payment gateways have transformed the shopping industry so much so, that some companies have closed up their high street store and now rely on their online sales alone. With more and more people turning to online stores, we are almost guaranteed to see this increase in this in the future.