It’s a merchant service that authorizes direct or credit card payments. An online payment gateway is provided by an e-commerce application service provider and it’s normally used for by online retailers, traditional stores, brick and mortar stores as well as other eCommerce ventures. For instance, it can be used to make Amazon or Best Buy payments. Note that payment gateways normally facilitate such type of transactions by transferring key information between the bank or front-end processor and payment portals like websites or web-enabled mobile devices.

How Does Online Payment Gateway Work?

An Online Payment Gateway works by simply authorizing the transfer of funds between the buyer and the seller. The process also involves the use of an auto payment calculator which ensures that the cash deductions are made correctly. For starters, the customer needs to place an order from an e-commerce store then the payment gateway will perform the following tasks to finalize the transaction:


The data to be sent between the payment gateway and the vendor’s web server is encrypted. The gateway thereafter sends the transaction details to the payment processor which is utilized by the vendor’s acquiring bank.

Authorization Request Sending:

After the card holder has entered their credit card details, the payment gateway will check if they have sufficient funds in their account. Additionally, it will also check if the issuing bank has set limitations for that card. The bank will issue an authorization request which could be “denied” or “approved”

Filling Order:

As per the information obtained from the bank, the card is either canceled or formed. All these transactions usually take place in the payment gateway system. The payment is usually processed per the response generated by the respective bank.

Note: although this process seems lengthy and complicated, it actually takes seconds.

Best Online Payment Gateways

One of the best transactional technologies Is online payment gateway. It offers a simple and convenient way of making purchases. But there are many payment gateways in the market currently. So, which ones can you trust with your payment details?

PayPal Payments


PayPal Payments

This is a successful payment processing service that’s designed for eCommerce users who don’t have PayPal accounts. The platform relies on an infrastructure with open API to offer a simple shopping solution. PayPal Payments Pro is an end-to-end platform that supports a variety of credit cards including American Express, Discover, Visa, and Master. It can also be used with PayPal and PayPal credit payments.

Amazon Payments


Amazon Payments

This is a streamlined payment service that’s made for Amazon shoppers. Amazon Payment has some similarities with PayPal Payments Pro. The platform can be used by both shoppers and merchants in order to complete online transactions for purchases. It uses the information in your Amazon account in order to complete your check-ins and outs. Just like most payment gateways, clients who use Amazon Payments are usually charged a fixed percentage of the money they are transferring.




This is a unique payment gateway that carries out transactions based on specific eCommerce needs. Do you have shoppers who have unique requests? Well, you can use WePay to handle those complex payment requests such as crowdfunding campaigns, multi-payers etc. This platform works for different sites and sizes.

WePay uses simple and fast integrated payments based on API technology. It’s suitable for in-person and online transactions. Note that this platform utilizes a customizable checkout flow to complete payments and refunds.




This is a payment platform which has an extensive functionality. Stripe is specifically designed for eCommerce and it’s loaded with premium customers such as OpenTable, Lyft, Pinterest, and Slack among others. The secure and customizable payment solution is compatible with multiple payment options including Apple Pay, Amex Express Checkout, and Alipay. It can also be integrated with cards such as American Express, MasterCard, and Visa. Stripe offers optimized reports and insights, giving user’s fee, charge, refund, and transfer information in real time.



Previously known as Moneybookers, Skrill is a payment gateway that uses the prepaid card principle. All you need to have is a customer account from your credit card or current account and then use it to perform online transactions. Users are usually charged a fixed percentage of what they are transacting. However, the fee is usually lower on the sender’s side and it can go as low as 1 percent of the transaction value.

Criteria for Choosing Best Online Payment Gateway

The right payment gateway makes it easy to easily and securely make online transactions. For security details, it’s important that your personal details are not leaked to 3rd parties. So, what are some of the factors that you should consider when choosing a payment gateway?


Anyone doing online shopping wants a payment getaway that’s reputable in providing safe customer checkouts. A payment getaway should be able to securely hold the customer’s personal data. If you want to be sure of security, check if the payment gateway complies with the PCI DSS Standards.

Hosted vs Integrated Payment Gateway

Hosted payment gateways are usually easy to set up and suitable for new stores. It normally redirects the customer to the payment processor’s platform in order to input their payment information. Integrated payment gateway, on the other hand, connects an eCommerce website via the API provided by the gateway. The benefit of an integrated gateway is that customers don’t have to leave your store so as to input payment details or submit orders.


Each gateway model has different fee structure. So, it’s important for you to choose a payment gateway model which will fit your budget.

Customer Support

Make sure that the payment gateway offers live technical support. Besides that, customer support should be within your normal working hours so that you can easily solve any technical issue that may arise during transactions.

Final Thoughts

Payment gateways have helped merchants to flourish in their business. These platforms offer convenience and improve customer service, allowing the merchants to make more business profits and reduce late payments.

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