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What is a payment gateway?

  • A payment gateway is a merchant service provided by an e-commerce application service provider that authorizes credit card or direct payments processing for e-businesses, online retailers, bricks and clicks, or traditional brick and mortar.

 

  • A payment gateway is the technology that captures and transfers payment data from the customer to the acquirer and then transfers the payment acceptance or decline back to the customer. A payment gateway validates the customer’s card details securely, ensures the funds are available and eventually enables merchants to get paid. It acts as an interface between a merchant’s website and its acquirer. In other words, a payment gateway works as the middleman between the customer and the merchant, keeping the payments ecosystem rolling smoothly, as it enables online payments for consumers and businesses.

How do payment gateways work?

The transaction flow is the same whether you’re using a physical or virtual payment gateway.

Mobile and online payments use digital capture files to package the credit card information rather than output from a credit card reader:

1. The buyer makes a credit card payment through the merchant’s credit card reader or e-commerce site.

2. The payment gateway:

  • pushes the transaction information to the acquiring bank (the merchant bank or acquirer);
  • determines which credit card network (Visa, MasterCard, Discover, or American Express) issued the buyer’s card;
  • routes the transaction information to the correct payment switch

 

3. The payment switch routes the request to the bank that issued the buyer’s credit card (the issuing bank) and pushes the transaction information onto the correct credit card network.

4. The issuing bank applies fraud detection procedures to determine the legitimacy of the transaction and confirms the buyer has sufficient credit in their account to accommodate the purchase.

5. The issuing bank approves (or rejects) the transaction and sends this information back through the credit card network to the merchant bank and the payment gateway.

What’s the difference between a virtual terminal and a payment gateway?

Payment gateways let you accept credit card payments, in person or online, by transferring money between your merchant account and a payment processor through a credit card terminal or processor.

A virtual terminal sometimes referred to as a web POS or cloud POS  is software that lets you take payments from any device (e.g., desktop, phone, or tablet) running it, which turns the device into a point-of-sale terminal. Virtual terminals are ideal for businesses that don’t need an online store but do need to accept remote payments through phone, mail, or fax.

What is a merchant account?

Merchant accounts are a key aspect of business operations for most merchants.

A merchant account is a type of business bank account that allows a business to accept and process electronic payment card transactions. Merchant accounts require a business to partner with a merchant acquiring bank who facilitates all communications in an electronic payment transaction.

Merchant account relationships are essential for online businesses. These account relationships involve added costs which some brick and mortar establishments may choose not to pay by accepting only cash for deposits in a standard business deposit account. Merchant accounts are a type of commercial bank account.

Online businesses, however, are required to establish merchant account partnerships as part of their business operations since electronic payments are the only option for customers in making purchases.

For other terms please see our Glossary

How are merchant accounts, payment processors and payment gateways connected?

A merchant account is what establishes a business relationship between you and your merchant services provider (e.g., the bank account for your business). With traditional credit card processing services, you cannot take payments until after you apply and are approved for a merchant account.

A payment processor is the bank that actually processes the payment request. When customers pay with a credit card, payment gateways connect merchant accounts with payment processors by transferring credit card information between the bank that issued the credit card and the bank account for your business.

What is PCI DSS compliance?

PCI compliance is a security checklist created by the Payment Card Industry Data Security Standard (PCI DSS) to help reduce fraud. All organizations that process credit and debit card payments, and all merchants that accept card payments, are responsible for their own PCI compliance.

What kind of services do you provide?

There is nothing more important for your online business than reliable and secure payment processing.

For more than 10 years Universal Payment Integrators (UPI) has been providing different businesses with the services of a secure and easy payment gateway.

A close partnership with a number of acquiring banks gives us the possibility of cooperation with merchants working in both high- and low-risk industries.

Recently founded startups without processing history are now able to become a partner of a European acquiring bank and successfully develop their business.

As for experienced merchants we are ready to offer individual tailor-made solutions according to their type of business.

View more about the services we provide in the section Services

Does the merchant need to be based in Malta?

To apply to the UPI payment solution you can have a company elsewhere. Contact us to find out what we can offer for your industry and country.

What cards can be processed by Universal Payment Integrators?

We are able to give you the possibility to accept Visa, MasterCard credit cards. Contact us to discuss options  and details.