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How does a payment gateway work?

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Quick answer

A payment gateway securely handles online card payments. When you check out, it encrypts your card details, sends them to be authorized by the banks, and returns an approval or decline — all in seconds — so the store never directly handles your raw card data.

Step by step

  1. It securely processes online card payments.
  2. It encrypts and forwards card details for authorization.
  3. Banks approve or decline within seconds.
  4. It shields merchants from handling raw card data.

People also ask

How does a payment gateway work?
It encrypts your card details, routes them to the banks for authorization, and returns an approval or decline.
Is a payment gateway the same as a payment processor?
Closely related — the gateway captures and secures the data; the processor moves the money between banks.
Why are payment gateways secure?
They encrypt data and meet strict security standards (like PCI DSS) so card details stay protected.