A ‘Payment Gateway’ refers to the piece of technology that allows your website to take payment from customers.

It is an interface / portal that connects to your online checkout.

How does a payment gateway work?

Payment gateways typically work in the following manner…

  • Your customer adds the product/service they wish to purchase to their basket on your website and heads to the checkout
  • Your customers enter their debit/credit card details into the payment gateway
  • The payment gateway collects the customer’s payment card information and encrypts the data
  • The payment gateway sends the encrypted payment data to the payment processor, the payment processor then charges the payment card used
    • Depending on the payment gateway used, the payment made by your customer is either deposited in your bank account straight away, or at a pre-determined deposit interval.
  • Then the customer receives their order confirmation

Examples of payment gateways

There are many payment gateways available, they include…

  • PayPal
  • Stripe
  • GoCardless
  • Square
  • SagePay

How much is a payment gateway?

It varies payment gateway to payment gateway.

Payment gateways typically charge an initial set up fee, a monthly fee, and a small fee for each transaction. Some have a larger initial set up fee and either none or a very small transaction fee, whilst others, have a negatable set up fee but then have a larger transaction fee.

It is about finding the one that is best for your company based on the number of transactions your company handles vs. the value of those transactions.

There are payment gateway advisors who can help you find the best one for your company, Digital Nachos is happy to put you in touch with an advisor, simply get in touch.

What is a White Label Payment Gateway?

A white label payment gateway is simply a standard payment gateway that allows you to mask their branding with your own. This helps give a more consistent payment process to your customers.

Can I Build my Own Payment Gateway?

You can build your own payment gateway, however, the costs of doing so would outweigh the costs of the off the shelf payment gateways mentioned above.

The reason for this – the cost of…

  • technology required to securely process private payment details
  • legal requirements, regulatory compliance, and red tape surrounding handling of online payments
  • international transactions and different currencies that you might need to handle.

Unless you have an extremely large budget, stick to the off the shelf products that handle all of the above for you.

Published: 13th May 2024

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