Payment Gateways for eCommerce: How do they work?

With payment gateways, payments are processed effectively, securely, and hassle-free. The payment gateway approves the funds transferred to the seller instead of transmitting them to the seller. Moreover, payment gateways follow PCI compliance standards to prevent fraud, implementing various security measures as expected. The following steps explain how a payment gateway works for eCommerce:

  1. Firstly, Orders are placed on eCommerce websites and the necessary credit card information is entered.
  2. Secondly, As soon as the web browser receives data from the merchant’s web server, it encodes it.
  3. Thirdly, Lastly, the merchant acquiring the bank’s payment processor receives the transaction data from the gateway.
  4. Fourthly, Payment processors send data to card affiliations after receiving transaction data.
  5. Fifthly, An approval request is reviewed and approved or denied by the credit card’s issuing bank.
  6. Sixthly, A merchant and customer approval is then sent to the gateway by the processor.
  7. Seventhly, Upon acquiring this reaction, the gateway sends it to the site/interface for payment processing.
  8. Then, Once the transaction has been completed, ‘Clearing Transactions’ is activated.
  9. At last, Auth-holds are changed to debits by the issuing bank, allowing a “settlement” to take place with the vendor’s bank.

Explore the Top eCommerce Payment Gateways

Make sure the payment gateway meets all the business requirements and seek advice from experts based on reviews. Our top high risk payment gateways that suit your business needs are as follows:

1. Authorize.Net

This payment gateway provider was founded in 1996 and is considered one of the top players in the eCommerce industry. Authorize.Net is used by about 400,000 merchants to accept credit cards and electronic checks.

Authorize.Net’s Merchant Interface provides merchants with access to their accounts. Access can be controlled by setting up several user accounts. It’s an easy win for with an extra feature. Magento stores and eCommerce experts even consider it a good fit.

The processing fees for Authorize.Net are 2.9% on transactions and $0.30 for the “all-in-one” payment provider option.

2. Stripe

Stripe was established in 2010 and provides merchants with payment processing solutions. They stand out from other payment processing suppliers because of their comprehensive development tools. The Stripe API allows website owners to customize the platform as per their needs. Thus, it is an essential part of Stripe’s eCommerce strategy.

The software includes several incorporated applications, which means that users don’t need to be coding experts to use it. It takes 7 days for the online payment to be processed and there are no hidden charges.

Per domestic transaction, Stripe charges 2.9% plus $0.30

3. Braintree

Our mobile payment gateway platform recommendations include Braintree, which was founded in 2012. Its programming is different, and the code can be explicitly added to a merchant’s online store by venture capitalists and investors. 

The PayPal service provides customers with a secure checkout experience, encouraging them to return. E-Commerce businesses seeking to better manage orders and process payments can benefit from this payment gateway.

For every transaction processed through Braintree, there is a 2.9% + $0.30 fee.

4. PayU

Designed to fill in the gaps left by complex service providers, PayU is an Indian payment-processing company.

 Over a variety of other payment methods, PayU offers the best conversion rates and acceptance. This platform can be integrated into any website, application, or third-party system by using PayuBiz APIs and SDKs. 

A single tap is all it takes to make a payment with PayU. Through this technology, repeat/second-time customers can skip keying in their CVV repeatedly. To ensure payment information security, the platform even reads and submits OTP on behalf of customers.

5. Amazon Payments

A secure and simplified payment service for eCommerce customers is provided by Amazon Payments. Merchants and customers can use the service to facilitate online purchases. Check-ins and checkouts are completed based on data already inserted by customers in their Amazon accounts. 

Using a single login, the customer is recognized instantly and can complete the transaction online or on a mobile device. In order to reach a global audience, Amazon accepts payments in several languages and supports all major currencies.

Processing fees for Amazon Payments are 2.9% on domestic transactions and $0.30 on international transactions. There is an increase of 3.9% in international fees.

6. PayPal

As part of its recent acquisition of Honey Science Corp. (a digital shopping and rewards platform), PayPal paid $4 billion in cash. 

Merchants are not required to pay once the sale is completed. You can use standard PayPal merchant services without signing up if you want to pay with a credit card or Visa. When using PayPal Standard, you may leave the site to log in to your PayPal account when you want to check out. Using PayPal Pro, merchants can customize their entire checkout process so consumers don’t have to leave their site. Credit cards can also be accepted by fax, mail, or phone.

Processing fees for PayPal transactions are 2.9%, and there are no monthly fees

7. Skrill

Merchants and consumers can both use Skrill’s eCommerce payment gateway. Skrill’s mobile app allows retailers to make international payments and pay for products and services wherever they are. It is possible for active users to apply for a prepaid Mastercard and use it anywhere they want to withdraw assets or buy products. 

Using Skrill is easy. You can connect your account to any bank account worldwide, and your payment information is securely protected. Skrill does not charge for creating an account, but there are fees associated with sending or receiving money. 1.9% transaction fee for Skrill transactions

8. 2CheckOut

You can’t go wrong with 2CheckOut if you’re looking for instant payments. Several similar top lists and classifications list this payment processing solution as a fully-featured solution. Using this prominent US-based payment gateway provider, the business can operate in 15 languages and 87 currencies around the world. 

9. Orangepay

In terms of payment gateways, Orange Pay is one of the best. By guaranteeing compliance with laws, and protecting fake transactions, it can provide comfort and reduce risks. Different approaches are less likely to cause rebelliousness with Orangepay. In the same way, SSL encryption and 3D security protect private information.

With this payment gateway provider, users can choose from a wide range of popular payment channels, including VISA, MasterCard, Bitcoin, Qiwi, PayPal, Krill, etc. 

10. BlueSnap

By supporting multiple languages and currencies, BlueSnap is a dedicated payment processor for merchants and retailers. With direct payments, it can be integrated with all major marketplaces and shopping cart platforms. SaaS (Software as a Service), gaming, invoicing, and even desktop and mobile applications can be created using it.

Clients can even pay without entering MasterCard or credit card information thanks to its Subscription Billing Engine.


You must consider the above-mentioned factors before choosing and implementing a payment gateway provider. An alternative is to hire a professional like 5 Star Processing and let them handle the technical aspects of integration. Please contact us if you want more information about how payment gateways work for small and large eCommerce businesses.