Bienvenido a la interfaz de negocio de Unlimint

Payment Essentials: What is a Payment Gateway and How It Works

September 10, 2020 4 min de leer
A payment gateway is a basic component of a regular payment life cycle that every vendor needs. Learn what is a payment gateway and how it works, and how to select a provider that will allow for safe transactions.
Unlimint team
Your payment experts
Unlimint team
Your payment experts

There is a major rule in any business: making it as easy as possible for your customers to pay is important for increasing sales. But what exactly happens between your client sending payment and you getting paid? Actually, for that, you can thank payment gateways.

Every merchant wants to have fast and seamless transactions, but with so many options in payment services, it’s a difficult decision to make. Besides technical details, you have to consider convenience for clients and select a service that integrates easily with your existing platform. In this article, we will explain the basics of payment gateway and explain how to choose a payment gateway provider that will serve the needs of your company.

What is a payment gateway

From a technical standpoint, an online payment gateway is a software that allows a merchant (e.g. eCommerce website) to receive online payments from their clients.

While most online payments commonly refer to processing credit cards, the advanced payment gateways are able to combine different payment methods, such as e-wallets or more recently crypto payments into a unitary interface, accounting for a flawless payment experience for shoppers regardless of their chosen payment options.

Often, payment gateways provide the connection to an acquiring bank, which for credit card transactions is the ultimate link in the authentication process, and is the entity that holds the customer’s money until payout. 

Since they handle very sensitive information such as cardholder’s data, the security aspect is of utmost importance. In this sense, there are standards and entities which regulate and evaluate the security level of such a software solution, such as strong customer authentication (SCA) under the revised Payment Services Directive (PSD2).

Consider the payment methods in your area

When looking for the payment gateway, you should initially acknowledge whether a gateway is available in your home market as it both needs to meet the local regulations and support the more common payment methods in your area. You may find that some of them may focus solely on EU markets and merchants. That’s why if you work with specific geographical regions like Latin America and have to deal with local payment methods such as cash payments or direct transfers. With its well-established infrastructure in local markets, Unlimint can offer you more than 500 payment methods. 

How payment gateways work

How Payment Gateway Works

Once a customer has filled a shopping cart with desired items, they arrive at the checkout – the place where the payment process begins. Although the entire payment process happens in mere seconds, what happens in the background may seem quite complicated: 

1. Checkout

During the checkout, a new payment order is created in the system via a payment gateway. Then, the customer has to fill and submit the payment form with the credit card information. Once completed, it encrypts this data according to the strict security measures PCI DSS, storages, and sends it to the merchant‘s acquiring entity or bank.

2. From the acquiring entity to the processing center

The collected encrypted data goes to the payment network, where it is handled by the bank and then directed to the processing center.

3. Approval or decline

At this stage, the processing center authorizes the payment and checks with the corresponding credit card issuer to make sure that everything is in order. Then, the payment gateway receives a response for transaction approval or decline.

4. Transaction approval

When the credit card issuer approves the transaction, the payment gateway gets the final response and redirects it to the merchant’s website, letting the customer know that the transaction is successfully completed (or rejected, it depends on the case).  

5. The payment gateway informs the merchant about the outcome of the transaction.

6. Payment settlement

The payment gateway settles payment with the merchant. 

Choose the best payment gateway services for your business

Don’t go with the first provider you come across. Take your time and review the features that can be valuable to your business. 

When choosing the payment gateway, consider the following:

  • Modern vs classic gateway. One of the most popular examples of modern gateways is PayPal. Here you don’t have to set up a merchant account (just a regular user account). It is faster but incurs higher costs. On the other hand, a classic gateway is less expensive and is less likely to send your shoppers offsite, which is great for conversion.
  • International payments. If you want to take advantage of the global market, make sure that the chosen payment gateway works in the needed markets. Your customers might come from any corner of the globe. So you should allow global payments. With Unlimint partnership solutions, you can offer international payment gateway services to your customers. This model is suitable for PCI compliant platforms, software integrators, PSPs, and software providers. 
  • Fees. Some services may have higher speed and better range of currencies while others offer lower fees or zero setup costs. Although your choice depends on your financial opportunities, don’t fall just for the price. If you find a cheap service make sure it doesn’t have hidden costs. 
  • Reporting. Depending on the size and your business needs, you may want to have detailed reports that cover transaction activities, chargebacks, refunds, fees, etc. Some providers give an opportunity to play around with demo accounts before committing.
  • Security features. When looking for a payment gateway solution you should make sure that it meets security-related criteria and has updated encryption standards.


Although there’s no “fit-for-all” payment gateway out there, you still have a good deal of options to match your business. For some merchants, the cost may be the highest priority. For others, it may be specific payment methods or currencies. Make sure to check at least several options before you choose the final provider.


¡Tenemos todos tus datos, gracias!