What It Is
A payment gateway is the secure middleman between your checkout and the financial networks. When a customer enters card details, the gateway encrypts them, passes them along for approval and reports back whether the payment went through. It is the online version of the card terminal at a shop counter. Well-known examples include Stripe, PayPal, Square and Authorize.net, and many combine the gateway and merchant account into one service.
Why It Matters for Your Business
Your choice of gateway affects fees, how quickly money reaches your bank, which payment methods you accept and what your checkout looks like. A cleaning company that wants deposits online needs a gateway that works with its booking system. A shop selling to repeat customers might want one that supports saved cards, subscriptions or digital wallets like Apple Pay and Google Pay.
Good to Know
Tip: choose a gateway that handles card details on its own secure systems, through hosted fields or a hosted payment page. That way card numbers never touch your server, which greatly reduces your security and compliance burden. Before launch, run test payments, refunds and a failed card to make sure each case behaves properly.