What in the World is a Payment Gateway?

Since there are so many aspects and levels of merchant accounts and what makes them function, we wanted to help answer some questions you may have. One of the most common questions we get here at Total-Apps when explaining the process of how funds travel from customer to merchant is, “What is a gateway?”


To put it simply, a payment gateway is an application that provides e-commerce businesses the ability to authorize credit card payments. It is the equivalent to the point of sale terminals located at retail locations. The payment gateway encrypts credit card details to ensure the information is passed securely. The payment gateway essentially takes the information from the payment portal and allows it to travel to the front end processor or acquiring bank.

Sound complicated? Don’t feel bad. It’s complicated to ensure that credit card information is passed in the most secure way.

Here at Total-Apps, we describe our gateway as a “toll road” that allows payments to travel out of the merchant’s payment portal on the way to their bank. We hope that helps clear up any questions or confusion you may have about a payment gateway. The more you understand the industry, the better position you’ll be in when signing up for a merchant account.