What is a payment gateway?
A payment gateway is the link between your business merchant account and the customer's credit card. A payment gateway is an e-commerce application service provider, it is the equivalent of a physical point of sale terminal.
A payment gateway serves as the front end to your merchant account, allowing you to manage funds, transactions, and the like. It also serves as a connection between your website and your merchant account.
Payment gateway takes data submitted via your secure order forms and presents it to your processing bank. It protects credit cards details, encrypting sensitive information such as credit card numbers to ensure that information passes securely between the customer and the merchant and also between merchant and payment processor.
The payment gateway's purpose is to take in the required information for processing a transaction, submit that information through the credit card and bank networks, and returns a response such as “Approved” or “Declined”.
Some of the better known payment gateway services are: Authorize.Net, Verisign, 2CheckOut.com, Linkpoint, Paysystems.com, Worldpay.com, and MerchantCommerce.
Some of the things to look for in a payment gateway are compliance with CISP, SDP and DISC (security initiatives put out by the major credit card companies), virtual terminal (to be able to accept transactions over the phone by typing in their data rather than only relying on your website), fraud prevention, recurring billing, methods of integration, cost and whether they can accept e-checks or not.