E-Commerce Dictionary
Gateway
Definition
An e-commerce service that authorizes credit card payments for e-businesses, online retailers, bricks and clicks, or traditional brick and mortar.
Deep Dive
In the context of e-commerce, a payment gateway is a crucial e-commerce service that authorizes credit card payments or direct payments for online businesses, online retailers, and traditional brick-and-mortar stores. It acts as a secure intermediary between the merchant's website, the customer, and the bank (acquiring bank) that processes the payment. When a customer enters their payment information on an online store, the payment gateway securely encrypts this data and transmits it to the payment processor, ensuring that sensitive financial details are protected during the transaction.
Examples & Use Cases
- 1A customer enters their credit card details on an online shoe store, and the integrated payment gateway (e.g., Stripe or PayPal) encrypts and securely processes the transaction with the bank.
- 2Shopify Payments, which is Shopify's native payment gateway solution, allowing merchants to accept various payment methods directly within their store.
Related Terms
Payment ProcessorMerchant AccountPCI DSSE-commerce Platform