What is a Payment Gateway? List and Types
What is a Payment Gateway? List and Types
A payment gateway technology allows businesses to accept online payments securely. When a customer purchases an e-commerce site, the payment gateway handles the transaction and securely transfers customer payment information from the merchant to the bank and back. Payment Gateway acts as a bridge between customers, merchants, and banks, ensuring the transaction processes happen smoothly.
Table of Content
- What is a payment gateway in banking?
- The List of Payment Gateway in India 2025
- Types of Payment Gateway
- Example of Payment Gateway
- How does Payment Gateway work? Step by Step
- How does Payment Gateway ensure information security?
- Benefits of using Payment Gateway for Business
- Conclusion
- FAQs
What is a payment gateway in banking?
In banking, a payment Gateway is a technology that allows businesses to take payments from consumers using credit or debit cards. The phrase refers to the payment processing gateways available in online retailers and the card-reading equipment in physical retail establishments.
The list of payment gateways in India 2025
- Instamojo Payment Gateway: It is an eCommerce Website Builder for Direct-to-Consumer Companies
- Easybuzz Payment Gateway: Use Easebuzz to simplify your online payment processing. Get quick and safe digital payment options for your company.
- PayU Payment Gateway: PayU makes it possible for companies in India to take digital payments using BNPL, QR, UPI, debit cards, net banking, wallets, and more.
- PayUbiz Payment Gateway: PayUbiz is an Indian online payment gateway for businesses that is accessible worldwide in a variety of currencies.
- Razorpay Payment Gateway: Razorpay is an online payment gateway. With Razorpay's Payment Suite, which supports Netbanking, Credit & Debit Cards, UPI, and more, you can begin accepting payments right away.
- CCAvenue Payment Gateway : Providing end-to-end PCI-DSS-compliant payment processing solutions, CCAvenue serves about 3 million merchants in all payment-related industries.
- MobiKwik Payment Gateway: Use MobiKwik to expedite wallet transfers, secure bill payments, and mobile recharges.
- PayKun Payment Gateway: The PayKun Payment Gateway makes it easier for you and your customers to make payments online.
- PayPal Payment Gateway: PayPal is a worldwide service that transfers money from your credit card to the seller without disclosing your financial data.
- Cashfree Payment Gateway: The top payment and API banking company in India is Cashfree Payments. It facilitates accepting and transferring payments for over 8,000 firms and serves various purposes, including bulk refunds, wage payouts, and vendor reimbursements.
- Airpay Payment Gateway: The leading supplier of payment gateway solutions in India, Airpay offers e-commerce solutions and payment processing services free of setup fees and hidden fees.
Google Pay Payment Gateway: Users can pay both online and in-store with Google Pay, a digital wallet and payment gateway. It is compatible with the mobile web and Android smartphones, tablets, and watches. - Atom Payment Gateway: Atom Payment Gateway is an online payment processing service that enables companies to accept a variety of payment methods via their website or app, including credit cards, debit cards, net banking, UPI, and more.
- Citrus Payment Gateway: Citrus Pay, an Indian fintech company, offers an online payment processing system called a "Citrus Payment Gateway" that enables companies to take digital payments from clients using a variety of ways, including digital wallets, debit cards, and credit cards
- DirecPay Payment Gateway: An online payment gateway called Direcpay assists Indian retailers in handling online payments. It is a Times of Money service.
- EBS Payment Gateway: Customers can make purchases from a merchant's website using the EBS Payment Gateway payment interface. It enables businesses to receive payments from clients via net banking, debit cards, and credit cards.
- Zaakpay Payment Gateway: Businesses and individuals can send and receive money online via Zaakpay, a payment gateway.
- Bill Desk Payment Gateway: Businesses and customers may accept and make payments online with BillDesk, a payment gateway.
- ePaisa Payment Gateway: Get paid quickly with ePaisa Online Payment Solutions, which processes all types of payments. No commotion. No trouble.
- Paytm Payment Gateway: A safe online payment system called Paytm Payment Gateway enables companies to take consumer payments.
Types of Payment Gateway
There are four types of payment gateways
- Hosted Payment Gateway
- API-hosted Payment Gateway
- Self-hosted Payment Gateway
- Local bank integration Payment Gateway
Hosted payment gateways
A hosted payment gateway is a payment processing solution in which your company's payment system is hosted by a third-party service provider, after which you incorporate it into your mobile application or website.
Simply clicking on a "buy now" link when the customer is ready to buy takes them to the host or payment service provider's (PSP) website.
API-hosted payment gateway
An API-hosted payment gateway allows clients to remain on the merchant's website during the checkout process by processing payments via an Application Program Interface (API).
An API-hosted payment gateway can be connected to several systems, including mobile ones, and provides a completely customizable checkout process. You have total authority over the website's design as a merchant, and you are also in charge of the transactions' overall security.
Investing in resources like SSL certification is necessary to protect sensitive data and guarantee adherence to strict security guidelines like PCI DSS.
A self-hosted payment gateway
One tool that enables companies to efficiently and safely keep complete control over the payment process is a self-hosted payment gateway. The self-hosted strategy guarantees a safe, personalized, and accountable payment experience by allowing merchants to administer and carry out payment transactions directly within their infrastructure.
Businesses may customize and manage the whole checkout process using self-hosted payment gateways to meet their unique needs, including branding and user experience objectives.
In a self-hosted solution, the merchant maintains strong control over the ownership and custody of payment information, including credit card numbers and digital wallet information. This improves data ownership and security while reducing dependency on outside suppliers.
Local bank integration Payment Gateway
To facilitate online payments and ensure smooth, region-specific transaction processing, firms can interface with local banks via a local bank integration gateway. This is essentially a feature-limited entry-level solution that cannot frequently accept refunds or make recurring payments.
Example of Payment gateway
Enabling safe online transactions requires a payment gateway. This is an illustration of how a payment gateway functions:
1. Customer Product Selection: A customer navigates to an e-commerce platform and chooses items for purchase.
2. Checkout Procedure: By clicking on the “Checkout” button, the customer is required to input their payment details, opting for any payment gateway as the payment processor.
3. Redirect to Payment Gateway: The customer is redirected to a secure payment page, where they enter their payment details, such as credit card information or UPI ID.
4. Transaction Confirmation: Following authorization, the customer receives a confirmation notification, and the transaction details are securely relayed back to the merchant.
How does Payment Gateway work? Step by Step
Having gained an understanding of what a Payment Gateway is and the various components involved in the online payment process, we will now examine the sequential steps through which a Payment Gateway functions:
Step 1: After selecting the desired products or services, the customer proceeds to the merchant's payment page, where they can choose from several Payment Gateway options to finalize their payment.
Step 2: The customer then selects their preferred payment method and inputs the necessary details in the designated fields.
Step 3: The Payment Gateway encrypts the card information before transmitting it to the acquirer for further processing of the payment.
Step 4: Once the OTP and other authentication measures are successfully verified, the transaction is completed, and the funds are transferred to the merchant's bank account.
A payment gateway is essential for enabling secure and efficient online transactions. Additional advantages of using a payment gateway include increased customer confidence, simplified international transactions, and round-the-clock payment capabilities.
By incorporating HDFC Bank Payment Gateway, businesses can broaden their customer reach and establish a secure platform for receiving online payments.
How does Payment Gateway ensure information security?
A payment gateway safeguards the information you provide by utilizing sophisticated encryption methods. With a solid grasp of what a payment gateway entails and its operational mechanisms, let us examine the essential strategies it employs to ensure the security of your data:
- HTTPS Protocol: Transactions conducted through payment gateways utilize HTTPS, which guarantees that all data exchanged online is encrypted and secure.
- Transaction Validation: A hash function is employed to validate transaction requests, utilizing a secret key that is known solely to the merchant and the payment gateway, thereby ensuring the integrity of the data.
- IP Address Verification: The IP address of the server making the request is authenticated to identify any potential malicious activities, thereby enhancing the security of the payment process.
- Virtual Payer Authentication (VPA): Endorsed by acquirers, issuers, and payment gateways, VPA is an integral component of the 3-D Secure protocol, providing an additional layer of authentication for online transactions, thus protecting both buyers and sellers.
Benefits of using Payment Gateway for Business
- Protection: Payment gateways protect against data breaches and fraudulent activity by facilitating safe transactions.
- Consumer Confidence: Security is infused via a payment gateway. Customers are more confident in the brand when they are aware of the payment gateway. This acknowledgment can organically foster confidence, enabling clients to buy goods or services without worrying about fraud or data theft.
- Worldwide Presence: With this feature, retailers may connect with clients throughout the world and expand their company horizons. Among the advantages that payment gateways offer are multi-currency transactions, which enable companies to take payments from customers around the world.
- Various Methods of Payment: Offering a wide range of payment options, including digital wallets, UPIs, net banking, debit cards, and credit cards, gives clients a lot of options.
- Quicker Transactions: Payment gateways greatly increase conversion rates and reduce cart abandonment by enabling quick authorization and settlement of payments.
- Accessibility Simplified: The majority of platforms have advanced dashboards that allow for thorough monitoring and control of the complete payment procedure.
Real-time data is available to users so they can quickly resolve any issues. For example, restocking can be started right away to avoid stockouts if a certain product is seeing significant sales velocity.
It is also possible to identify operational process inefficiencies.
Conclusion: Payment gateway
Payment Gateway, An essential component of the digital economy are payment gateways, which are interfaces used to gather customer payment information. These solutions lower some of the obstacles to online shopping by enabling consumers to safely and securely communicate their credit card information. Payment gateways have evolved from basic card-reading devices to complex systems that gather and verify PINs, signatures, and other information for merchant transactions.
FAQs: Payment Gateway
What is a payment gateway with an example?
One solution that enables companies to take and process payments in-person or online is a payment gateway. Payment gateways include, for instance, PayPal, Stripe, and Razorpay.
Is UPI a payment gateway?
Yes, consumers can move money between bank accounts using the Unified Payments Interface (UPI), a payment gateway. The National Payments Corporation of India (NPCI) created it in 2016.
Is Google Pay a payment gateway?
No, Google Pay is a mobile payment solution that enables customers to save payment information on their smartphone rather than a payment gateway. Both in-app and online purchases can be made using it.
Is Paytm a payment gateway?
Yes, Paytm is a payment gateway that lets businesses accept payments online and in-store. It supports a variety of payment methods, including UPI, debit and credit cards, net banking, and Paytm Bank Wallet.
What is the full form of UPI?
UPI stands for Unified Payments Interface. It's a system that allows users to make payments between bank accounts using a single mobile app.
Is SBI a payment gateway?
SBIePay is an online payment gateway service provided by the State Bank of India (SBI). It facilitates secure and convenient electronic transactions for various businesses and organizations, allowing them to accept payments online from customers.
What is API in UPI?
Applications can connect using a set of instructions known as an API, or application programming interface. When it comes to UPI, APIs let companies incorporate UPI into their websites and applications. This enables companies to take direct payments from clients.
Can I create my own payment gateway?
Yes, you can create your payment gateway, but it's a complex process. It requires a lot of technical knowledge, planning, and maintenance.
