Nature of payment gateway

What is a payment gateway?

"A payment gateway performs the same function as a point-of-sale terminal at a physical store. It allows your customers to pay by credit card on your ecommerce site. During payment processing, the gateway encrypts credit card details, validates these details, and authorizes the transaction. It ensures safe, fast payments for the customer and the merchant."

Source: Shopify, last revised on 04 May 2021

FinReg business tip

Payment gateways allow consumers to make transactions by way of credit card online. Depending on the payment gateway, it is likely to fall under multiple payment service activities listed under the Payment Services Act, such as merchant acquisition and money transfer.