An online payment gateway links a commercial/transactional portal or website and -normally- a bank. This process starts when the cardholder enter his/hers details after having performed a purchase on the website. The information is then encrypted at the cardholder's web browser side and securely sent to the merchant website. At this stage the encrypted information is forwarded from the merchant server to the payment gateway on a Secure Socket Layer encryption, which connects the processor used by the merchant's acquiring back. The processor forwards the transaction information to the credit card interchange, which then routes it to the issuing bank.



The reverse process happens within seconds as well, and along with the issuing bank's response some other details, such as: a notification code, the transaction status and the reasons why the transaction could not take effect -if any, are sent to the cardholder. In other words, this information passes by the credit card interchange, the acquirer processor, the payment gateway, the merchant's website and finally reaches the cardholder.

Apart from the above steps, the rest of the transaction happens in a different time frame, and it implies the delivery of the product and the money transfers from the acquiring bank to the merchant's nominated account.

Amongst other options merchants can take advantage of out of online payment gateways, one can list: authorize transactions, make refunds and capture payments by accessing the real time reports and tools set up for these purposes. In some occasions, online payment gateways also allow merchants to easily work with different currencies and card types.