That’s why we use payment gateways (sometimes also called “Merchant services”). A payment gateway serves as a middleman between you and the bank, mitigating your liability and reducing your programming costs drastically. Payment gateways are specialized in handling financial transactions and are very easy to integrate with your site. They take care of the hardest parts of securing a bank connection for you.
With a payment gateway, your customers can enter their credit card information on your website. Then, behind the scenes, your payment gateway takes that information to the bank and oversees the direct transfer of money from their account to yours. When your bank confirms the transaction was successful, the payment gateway tells your server to complete the transaction, and you can safely deliver the ordered merchandise knowing that you have safely received payment for it.
Your customers are typically not aware of which payment gateway your site uses. All they see is the screen where they enter their information, followed by the confirmation screen — all on your website.
If you are doing commerce and accepting credit card payments on the web, you will be required to use a payment gateway at some point. It is more efficient, more secure and a cheaper alternative than going into the banking business yourself!
#1 A customer enters their payment information. This can occur seamlessly on your site.
#2 The information is sent to the payment gateway through a secure connection.
#3 The payment gateway interfaces directly with your bank to transfer the client’s money into your account.
#4 The payment gateway receives confirmation the bank received the money, and responds with a yea or nay to your site.
#5 Your site can then confidently complete the transaction, knowing the money was received.
No sensitive information is stored on your server, reducing your security requirements and liability. From the customer’s perspective, they never left the site.
One note: A payment gateway will typically help you create a secure connection between you and them, and from them to the bank. For information on how to create a secure connection between you and your customer, see our article on SSL Certificates.