What is a payment gateway?

7 min read

Selling online

Online transactions seem so simple and quick on the surface, but there are a number of processes working together behind the scenes to move funds from buyer to seller.

A payment gateway is part of that “magic.” It’s a service that securely sends credit card information from a website to the credit card payment network for processing, then returns transaction details and responses from the payment network back to the website. Your business or organization needs a payment gateway if you accept (or want to accept) credit card payments online or on a mobile device. Think of it as the secure technology that provides a bridge between your business and your customer.

How to find the right payment gateway provider.

If your organization accepts credit card payments, it’s important to research and find the payment gateway provider that best fits your unique needs. Consider the following: 

  • Network security. First and foremost, a secure network is imperative. Customers must trust that their financial information is secure when making an online transaction with your business. Keep in mind that whenever you accept credit cards, whether online or in-person, you need to be PCI-compliant. With the Payflow Link from PayPal, our solution simplifies the work and cost of meeting PCI requirements.
  • Customer experience. In addition to security, buyers are looking for a smooth and convenient purchasing experience. If it requires too much time, effort or personal information to buy through you, they may turn elsewhere. PayPal’s payment gateway products allow merchants to accept major credit and debit cards, integrate with all major shopping carts, are mobile optimized and work with almost every payment processor. In addition, businesses can offer customers an additional payment option through PayPal Credit1 at no extra cost. 
  • Domestic and international payment acceptance. We live and work in a global market. Make sure you’re not limiting your business to only local sales. PayPal merchants are able to accept payments in 25 currencies from 203 markets around the globe.  
  • Fees. Make sure your payment gateway fits into your company’s budget. PayPal’s payment gateway offers no monthly processing minimums, cancellation, or other hidden fees.

A payment gateway versus a payment processor.It’s important to note that a payment gateway is not the same as a payment processor. Both could be involved in the transaction, but while the gateway securely authorizes the transaction, a processor simply transmits it. Payflow: The PayPal gateway.The payment gateway from PayPal is called Payflow. Payflow offers two gateway options to give businesses different levels of customization for their online checkout pages: Payflow Link and Payflow Pro. Payflow Link is available without a setup fee or monthly fees. With Payflow Link, your customers enter their payment details at checkout on a secure, PCI-DSS compliant template hosted by PayPal. You can choose to integrate an embedded template (which sits right in your website), or you can choose a customizable full-page template. All templates include PayPal and PayPal Credit, so customers have more options to pay.Payflow Pro, on the other hand, is fully customizable, so you can build a checkout experience as unique as your business. Everything is on the table, from language and layout to page sequence and PCI-DSS compliance options. You can add a PayPal button to help drive more sales, or use hosted pages and offer PayPal Credit, too. Payflow Pro is $25 per month, plus a one-time setup fee of $99. To get started with Payflow, you’ll first need a merchant account. And in case you don’t have one, you can easily sign up with PayPal Payments. It’s a solution that provides both a payment gateway and a merchant account.You can also access additional information by reviewing our FAQs at the bottom of this page.

The content of this article is provided for informational purposes only. You should always obtain independent business, tax, financial, and legal advice before making any business decision.1PayPal Credit is subject to consumer credit approval.