A payment gateway is a secure connection between an online store and the merchant's acquiring bank. The gateway reacts to each transaction that occurs in your online store, and sends information about it to the acquiring bank for processing.

When you connect your online store to a payment gateway, you don't have to handle sensitive customer credit card information yourself. That information stays with the payment gateway and is passed along to your merchant account.

The bank verifies the transaction and ensures that the customer's credit card number, expiration date, and other account information are correct. Payment gateways also provide real-time data about your sales and customers, which you can use to make decisions about accepting future transactions.

Connecting your online store to a payment gateway is quick and easy. Most gateways provide libraries of code that you can use in your shopping cart program to process the transaction before it's delivered to your customers. The exact steps differ with each gateway, so check their documentation for instructions on how to set up an account and begin processing transactions.

Once you have started processing transactions, keep your customers' credit card numbers secure by using SSL encryption when transferring data. You can also encrypt the information on your server to ensure that no one can access it while data is stored there.

Many payment gateways are available, and some specialize in selling software and services to small businesses. Others are designed to meet the needs of specific industries, such as online auctions or selling downloadable music.

The most important thing to remember about payment gateways is that they provide a secure link between your online store and the bank for processing credit card transactions. To ensure the security of your customers' personal information - including their financial accounts - take steps to protect their data by using SSL encryption and keeping your server secure.