A payment gateway is the technology that securely captures a customer’s payment details on a website, app or payment link, sends them for authorization and returns the result to the merchant in real time.

A payment gateway securely captures the customer’s payment details and sends them for authorization. The payment processor routes the transaction data between the merchant, the acquirer, the card schemes and the issuer. Many payment service providers offer both in a single solution.

A PSP gives businesses what they need to accept electronic payments, typically combining a payment gateway, transaction processing, acquiring relationships and multiple payment methods, so the merchant only needs one integration.

Authorization checks and reserves the funds on the customer’s card. Capture confirms the final amount to be charged. Settlement then transfers the captured funds, minus fees, to the merchant’s bank account.

3-D Secure adds an authentication step, such as a one-time password or approval in a banking app, to confirm the cardholder’s identity. Tokenization replaces card numbers with tokens, so sensitive data is not exposed when payment details are stored or reused.

The issuer is the bank that provides the card to the customer and approves or declines each payment. The acquirer is the financial institution that enables the merchant to accept card payments and receives the funds on the merchant’s behalf.