Every business that accepts debit and credit card transactions needs the ability to facilitate payments. The world of payment processing can be an arcane and confusing place to those unfamiliar, though.  One common source of confusion is the difference between payment gateways and payment processors and which a business might need. This guide will demystify these related, yet distinct, components of credit card processing and help you determine which is right for your business.

What is a payment gateway?

A payment gateway is a software tool that connects a customer’s payment data to a business’s merchant account by way of a payment processor. It can be used to facilitate both online and in-person transactions.  The payment gateway is the digital tool that encrypts transaction data to ensure it is secure. It also communicates the success or failure of the transaction.

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