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A payment gateway is an e-commerce system that helps support modern retail or other types of sales of products and services, over the Internet or at brick-and-mortar stores. Payment gateways authorize credit card payments in order to support point-of-sale systems.
A payment gateway can be situated in an entirely digital atmosphere, where credit card information is routed in from a shopping cart Web page, or from in-store tablet systems or other physical point-of-sale systems in brick-and-mortar retail locations and other temporary sale locations. Data goes to the payment gateway, and credit card information is encrypted for delivery. Payment gateways can also help verify payments at the bank.
Payment gateway services may be subscription-based, or they may charge fees for each transaction. In general, they help merchants to more effectively serve customers by providing a middleman service for the financial information that is so sensitive and important to protect during these transactions. For example, a payment gateway is great for any e-commerce store, but it also could be used in an event such as a concert, where tickets and concessions are purchased outdoors away from point-of-sale infrastructure.