Websites · Glossary
What is a payment gateway?
A payment gateway is the service that securely captures a customer's card details at checkout and passes them on for authorisation, then returns the approval or decline to the shop. It is the online equivalent of the card terminal. The processor, card network and the customer's bank do the rest of the work behind it.
When a customer clicks pay, a chain of companies decides in about two seconds whether the money moves. The gateway is the first link in that chain and the only one most shop owners ever configure.
Indunil Asanka · Co-founder
4 min read · Published
| Party | Role | Example |
|---|---|---|
| Payment gateway | Captures card details and sends them for authorisation | A hosted checkout page |
| Payment processor or acquirer | Routes the transaction and settles funds to the merchant | A bank or payments company |
| Card network | Carries messages between acquirer and issuer, sets rules | Visa, Mastercard, American Express |
| Issuing bank | Approves or declines and bills the cardholder | The customer's bank |
| Merchant account | Where settled funds land before payout | Often bundled by modern providers |
What happens when a customer pays
The customer enters card details on a payment form. The gateway encrypts them and sends an authorisation request through the processor and card network to the customer's bank. The bank checks funds and fraud signals and replies approve or decline, and the gateway tells the shop's checkout, which confirms the order. Later, approved transactions are settled: money moves from the issuing bank through the network to the acquirer and then to the merchant's bank account, minus fees. Stripe's explainer on payment gateways describes the same chain from the merchant's side.
Gateway, processor and all in one providers
Traditionally a business signed up for a merchant account with a bank, a processor to route transactions, and a separate gateway to connect its website. Modern providers such as Stripe bundle all three, so one account handles the checkout, processing and payouts. That is simpler, but it means the provider's rules, fees and payout timing apply to everything. In Australia, the Reserve Bank oversees the payments system and has reviewed card surcharging and payment costs, which affects what businesses pay and can pass on.
Security and PCI DSS
Any business that accepts cards must protect card data under the Payment Card Industry Data Security Standard, PCI DSS, maintained by the PCI Security Standards Council. The easiest way for a small shop to reduce its burden is never to let card numbers touch its own servers: a hosted checkout page or embedded fields from the provider take the card details directly, so the shop only receives a token or a payment result. That keeps most of the compliance work with the provider.
Common mistakes
Building a custom card form that sends card numbers through your own server is the riskiest mistake. Others include marking orders paid when the customer is redirected back rather than when the provider confirms payment, ignoring failed payment events, setting prices in the browser where they can be changed, and not testing refunds before launch. Each of these can lose money or customer data.
Where it shows up in OneCraft
OneCraft does not build its own payment form. When a site takes card payments, OneCraft opens a Stripe Checkout session as a direct charge on the owner's connected Stripe account, reads prices from the site's own database rather than the browser, and a webhook marks the order paid or refunded. Payments are available on paid plans; the platform fee is 2 percent on Starter, 1 percent on Pro and 0.5 percent on Pro+, with Stripe's own fees on top, and the free plan cannot take payments.
Questions people ask
Do I need a payment gateway to sell online?
If you want to take card payments on your own website, yes, or a provider that includes one. The alternatives are bank transfer, cash on collection or selling through a marketplace that handles payment for you. For most small online shops an all in one provider with a hosted checkout is the simplest route.
What is the difference between a payment gateway and a payment link?
A gateway sits inside your checkout and handles every order. A payment link is a single hosted page for one amount or product that you can send by email or message. Many providers offer both. The page comparing Stripe Checkout and payment links explains when each fits.
How long does it take to get paid through a gateway?
Authorisation takes seconds, but settlement to your bank account follows the provider's payout schedule, often a few business days, and can be longer for new accounts. Plan cash flow around the payout schedule, not the moment of sale, especially in the first months of trading.
Can I pass card fees on to customers?
Sometimes. In Australia, card surcharging rules are set by the Reserve Bank and enforced by the ACCC, a surcharge has been limited to the cost of accepting the card, and the Reserve Bank has been reviewing those rules, so check the current position first. Other countries differ. If you surcharge, show it clearly before the customer pays.
What is a merchant account?
A merchant account is the account that receives card payment funds before they are paid out to your business bank account. Traditional setups needed one from a bank. All in one providers usually include it, so you sign up once and the provider holds and pays out funds on its schedule.
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Create a website with OneCraftRelated questions
- What is a chargeback?What is a chargeback: a card payment reversed by the cardholder's bank after a dispute, the process, time limits, fee, evidence to send, and prevention.
- What is order fulfillment?What is order fulfillment: receiving, picking, packing, shipping and confirming an online order, in house against 3PL and dropshipping, and delivery rules.
- What is a refund policy?What is a refund policy: a shop's stated rules on returns and refunds, the consumer rights it cannot override in Australia and the UK, and what it should say.
- Stripe Checkout vs Payment LinksStripe Checkout vs Payment Links: a checkout page built per order by your site versus a reusable link made in the dashboard. Carts, stock and shipping compared.
Written and checked by the OneCraft team. Last checked .