What is a Payment Gateway?

In order to process credit card transactions online a database is created that immediately checks the transaction and then captures the funds to be deposited later in the merchant's account.

Online Payment Gateway – what is that?

Payment Gateways are usually a third party service that automates the transactions between the customer and the merchant. A payment gateway is a system that processes, verifies and accepts the credit card transactions on behalf of the merchant. Business owners are able to accept all kinds of electronic payment through these secure internet connections.

Why get an Online Payment Gateway?

Payment Gateways make real time online credit card processing possible. When a credit card transaction is made, it checks for validity, encrypts the transaction details, ensures its departure to correct destination and decrypts the responses that are sent back.

A Payment Gateway also helps you to accept:

• Credit Cards – it allows the clients to get real-time credit card authorization either via secure servers or via http with payment gateways.
• Electronic Checks – many payment gateways also help process electronic check transactions online or in real time.

The customers do not need to be directly in contact with the gateway, as the data is sent to the gateway via shopping carts and secure server. The shopping cart uses plug-ins to send information to certain gateways in an acceptable format.

Relation between a Merchant Account and the Payment Gateway

A merchant account allows the business owners to process all kinds of credit cards online and the payment gateway is a means of transportation that passes the credit card information from the merchant accounts to banks for processing the charges. So in order to process your credit cards online you require both, but most importantly you require the payment gateway.

InstaBill provides merchants with a merchant account that comes complete with a payment gateway that many other companies may not provide.


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