24th January 2020

Online Payment Gateway: What It Is and Why It’s Awesome

Owning a business, especially a startup, can be a nightmare at first.

Getting the necessary paperwork done, licenses, buying the right equipment, finding trustworthy partners, and of course, form a team of creative employees.

Plus, with it being the year 2020, it is very likely that you’ll need to accept payments online.

And if you are developing a mobile app per se, you will need to accept payments through it.

For that, you need an online payment gateway. Yet, not all PSPs are created equal, so it’s okay if you don’t know where or how to get started because we got you!

Below we introduce what an online payment gateway is, how it works, and why it’s awesome!

Here we go.

What’s an Online Payment Gateway?

Very simply put, an online payment gateway is the third party between merchants and consumers.

Its job is to securely transfer money from the customer’s bank account to the merchant’s in order to complete an order online.

At BigWallet Payments, we offer services and support to all merchants to ease the process of receiving online payments from customers.

Thanks to our partnerships with reputable acquiring banks, our easy payment gateway and robust reporting tools, we can help you with your setup and thus start receiving payments in no time.

The technology found in an online payment gateway captures and transfers the payment data from the customer to the merchant, and then transfers the payment acceptance (or decline) back to the customer.

An online payment gateway service also encrypts the holder’s sensitive credit card details, and that information is passed securely from the customer to the acquiring bank in order to complete the order.  

Needless to say, all these steps need to happen in seconds, to provide a customer with a quick and smooth payment experience.

Payment is the last stage of the buying cycle, and the buying experience can make or break a sale!

Fortunately, you can easily have fast and secure transactions at your fingertips.

How Does This Work?

BigWallet Payments offers two types of Online Payment Gateways: Hosted Payment Page and Server-to-Server.

Here’s what each of these means (and does).

Hosted Payment Page

When the merchant uses this mode for their business, the customer will be redirected to BigWallet Payments-hosted payment page in order to make a purchase.

The client will then be asked to enter their card details in order to execute the payment.

Since BigWallet Payments holds a PCI DSS certificate, the transaction is secure.

Additionally, the merchant doesn’t have to be PCI DSS compliant to use this mode, because we’ve got you covered!

You can learn more details about our hosted payment page transaction process here.


The Server-to-Server option means that when the client wishes to make a purchase online, the merchant is in charge of collecting and passing the card data onto BigWallet Payments’ platform for further processing.

In order to do this, however, the merchant needs to be a fully PCI compliant, and perform an initial payment request.

Regarding merchants who are not fully PCI compliant can use the Hosted Payment Page to collect payment data securely.

This option enables clients to complete their purchase without being redirected to the payment page of the payment gateway.

If you’re wondering how the transaction process occurs with this option, you can view our detailed graph here.

Still confused? No worries!

Many might find the way in which online payment gateways work confusing.

There’s no need to panic though!

If you’re still trying to wrap your head around everything we said so far, below you can find a more detailed explanation.

So, to break things down:

  • Payment Gateways play a key role in processing and authorizing transactions between clients and businesses.
  • Their aim is to keep your card details safe when purchasing products or services online.
  • Card information is passed safely and securely to the merchant through the payment gateways.

These are the five (5) basic steps on how this is done:

Step 1: The customer selects what they want to purchase from the merchant’s website or app. The product/service is then added to the usual “cart” or any equivalent button.

Step 2: When you proceed with the well-known “Buy Now” command, the order is then transferred to the merchant’s system securely. When this happens, the transaction will be sent to the issuing bank, the “3D secure page” to request transaction authentication.

Step 3: After you complete the authentication process, the transaction will be completed if, of course, there’s enough money in your account for the purchase you want to make.

Step 4: Payment gateway sends a message to the merchant accordingly.

Step 5: Your bank will then settle the money with the payment gateway, and then the payment gateway will settle the money to the merchant.

Why It’s Awesome

As previously mentioned, when someone tries to make an online purchase, they need to enter their card details, right? But how do you know that the card they’re using is actually theirs?

Enter payment gateways.

Without payment gateways, fraudsters would have easier access to your card details and personal data.

The absence of payment gateways would not only increase fraud risk but could also have as a result illegitimate transactions made on your behalf, potentially damaging your brand and your business.

Besides fraud, a payment gateway also secures merchants from expired cards, insufficient funds, closed accounts or exceeding credit limits.

So there you have it.

  • Security when ordering products/services online,
  • Fast and efficient paying procedure,
  • Both seller and buyer being protected in the process of the order.

Now, how awesome is that?!