How Does A Payment Gateway Work?

The diagram below shows how a payment gateway is used in processing online transactions. From the online store, customer’s payment credentials are passed on to the payment gateway for verification and authentication. After verification, the payment gateway collects the payment from the customer’s bank account and deposits it to the merchant’s bank account. The payment gateway will return the information to the online store with the payment confirmation. After receiving the confirmation, the merchant processes the order and ships the item to the customer. Compared to manually processing payments, using of payment gateways allows the store owner to handle payments fast, efficiently and securely.

Click Image to Enlarge