Payment Gateway

What is a Payment Gateway?

A payment gateway is a service that processes card payments securely between your website and the customer's bank. It encrypts sensitive card data, communicates with banks, and approves or declines transactions.

How Payment Gateways Work

1. Customer enters card details
2. Gateway encrypts the data
3. Request sent to payment processor
4. Processor contacts card network (Visa, Mastercard)
5. Bank approves or declines
6. Result returned to your site
7. Funds transferred to your account

This happens in seconds.

Popular Payment Gateways

Stripe

Developer-friendly, excellent documentation, competitive rates. Very popular with modern websites.

PayPal

Globally recognised, customers can pay with PayPal balance. Offers express checkout.

Square

Popular with businesses that also have physical locations.

Worldpay

Enterprise-focused, strong in the UK.

Shopify Payments

Built into Shopify. Stripe-powered with simplified setup.

What to Consider

Fees

Typically 1.4-2.9% + 20-30p per transaction. Compare carefully.

Supported Cards

Visa, Mastercard, Amex – ensure you can accept what customers use.

International

Multi-currency and international card support if selling globally.

Integration

How easily does it work with your platform?

Security

PCI compliance, fraud protection, 3D Secure support.

Payout Speed

How quickly do funds reach your account?

Gateway vs Processor vs Merchant Account

These terms are often confused:

• Gateway: The connection between your site and processor
• Processor: Handles the actual transaction
• Merchant Account: Where funds are held before your bank

Modern services like Stripe combine all three, simplifying setup.

For Small Businesses

If you're just starting, Stripe or PayPal are usually best:

• Easy setup
• No monthly fees (transaction fees only)
• Good documentation
• Trusted by customers