To accept credit card payments via the Internet, merchants must have a payment gateway. The gateway is a middle process between a website’s order entry and a bank. It acts as a security measure to protect financial data by encrypting payment data from the website, routing that data to the bank, and then reversing the process by taking payment authorization information from the bank and routing it to the merchant.
In most cases, there is no software required by the merchant, since the gateway provider hosts required tech on their own systems. In rare cases, or in cases involving large national or global merchants, proprietary gateway systems can be created.
Payment gateways may be included in ecommerce packages that include virtual checkout terminals and shopping carts, but there are also companies that offer just the gateway product. These companies work with clients to integrate third-party gateway functionality with existing shopping carts and terminals. Companies that want to set up online credit card payments should speak with a merchant services representative; companies that aren’t already taking credit card payments onsite may need to set up a merchant services account. Usually, merchant services will handle most of the work of setting up a payment gateway.