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Information about Payment Gateway?

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What is Payment Gateway?

A payment gateway is an e-commerce application service provider service that authorizes credit card payments for e-businesses, online retailers, bricks and clicks, or traditional brick and mortar.

In other words an ecommerce payment gateway is a service that authorizes credit card payments and processes them securely with a user’s merchant account.


More About Payment Gateway?

  1. Transfer of information between payment portal and acquiring bank.
  2. Protect credit card details by encrypting sensitive information.
  3. Pace and ease
    4.Efficient and effective.

Why is Payment Gateway needed?

Payment Gateway holds the essence of any e-commerce site. One cannot think of making or receiving on-line payments without a Payment Gateway. Payment Gateway basically refers to an e-commerce service that authorizes payments for e-businesses & online retailers. It, in a way, represents a physical POS (Point-of-sale) terminal located in most retail outlets. Payment gateways encrypt sensitive information, such as credit card numbers to ensure that information passes securely between the customer and the merchant.

How Payment Works?

1)A buyer purchases an eBay item and enters a credit card number in eBay checkout.
2)Details about the purchase are sent by eBay checkout to the payment gateway for processing.
3) The payment gateway forwards transaction information to seller's bank.
4)The seller's bank forwards transaction information to the bank that issued the buyer's credit card to authorize the transaction.
5)The bank that issued the buyer's credit card either approves or denies the transaction and sends that information back to the seller's bank.
6) If the transaction is approved, the bank will deposit funds on a merchant's account at a scheduled time.
7)The payment gateway sends transaction details and response back to eBay.
8)eBay lets the buyer know if the transaction was approved or denie


  1. Guaranteed fraud problem mechanisms in place.
  2. Easy and quick access.
  3. User Friendly management control panel.
  4. Availability almost everywhere.


  1. High account setup cost
  2. Some private portals can freeze your account and money.
  3. Lack of financial banking.
  4. Fluctuating and discriminative rates.

Video Tutorial for Payment Gateway Introduction

posted Nov 20, 2014 by anonymous

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The payment gateway is mostly supported in an e-commerce store. It provides the best online payment experience to the customer. It is a  faster-processed method used by 85% of the customers and business nowadays.

Some of the payment methods are:
- Debit Card.
- Credit Card.
- PayPal.
- CCAvenue.
- American Express.

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