How Payment Gateways Work?

A payment gateway is a secure system that authorizes payments for online purchases. When a customer clicks the “buy” button on a retailer’s website, the payment gateway processes the customer’s payment information and then sends an approval or denial message to the retailer.

Many payment gateways are connected to credit card processors so they can accept Visa, MasterCard, American Express, Discover and JCB.

If the payment is approved by the credit card company or bank, then the retailer receives an approval code through the payment gateway. That code is then sent to the customer’s browser which completes the transaction with a “thank you” page.

Front-end application programming interfaces (APIs) are a type of software development kit that allows users to interact with a website via a browser. Developers can use these APIs to add elements to a website or change the behavior of other websites. This technology is often used to add widgets, validate forms and authenticate users. It can also be used to create a payment gateway.

In addition to the front-end APIs, payment gateways also have back-end APIs that allow developers to manage their account, view transaction history and more. The back-end APIs are used by shopping carts, order management systems and other applications that need to interact with the payment gateway.

Most payment gateways use a combination of front-end and back-end APIs to provide a complete set of features for their customers.

Now that you know how payment gateways work, let’s take a look at some of the most popular payment gateways on the market.