A payment gateway is an e-commerce application service provider service that authorizes payments for e-businesses, online retailers, bricks and clicks, or traditional brick and mortar. In other words, a payment gateway provides a secure connection between an online store and its internet merchant account. The payments you make when you are buying either on an online store or a physical store, by using a credit card go through a payment gateway that verifies your payment. It is the equivalent of a physical point of sale terminal located in most retail outlets. Payment gateways protect credit card details by encrypting sensitive information, such as credit card numbers, to ensure that information is passed securely between the customer and the merchant and also between merchant and the payment processor.
A payment gateway facilitates the transfer of information between a payment portal (such as a website, mobile phone or IVR service) and the Front End Processor or acquiring bank. When a customer orders a product from a payment gateway-enabled merchant, the payment gateway performs a variety of tasks to process the transactions. Basically, the payment gateways are a secure connection to the processing networks. As far as processing networks go, they are very complex networks that connect directly to the back-end processors and they also connect to the card issuing banks. The processors have a series of platforms under them that the payment gateways connect to.
We use Google Wallet and PayPal. Both are reliable and secure gateways that have strong security built in to prevent identity theft and other payment frauds.