A Beginner’s Guide to Payment Gateways

A payment gateway is the final step of the sales process on an eCommerce website. It is also one of the most important things to consider when launching an eCommerce business. Payflex has put together a  beginner’s guide to eCommerce payment gateways to help answer any questions or address any concerns you may have. 

But first, what is a payment gateway?

A payment gateway is an eCommerce service that processes, authenticates, and accepts or declines transactions on a merchant’s behalf. It essentially acts as a middleman between merchants and customers. This is a seamless process and a customer does not directly interact with the gateway. 

The gateway itself is simply a secure online link between the merchant and the customer’s bank. Sensitive information, such as credit card numbers, need to be protected at all times from fraudulent parties. This information is encrypted so it can be passed between customer, merchant and payment processor securely

No two gateways are the same, and each one comes with its own set of pros and cons. But, all gateways must provide increased levels of convenience , streamline processes, and provide pain free check-outs for your customers. 

How do gateways work?

  • The customer makes a purchase online and their details are submitted through the payment gateway
  • The gateway collects and transfers the information needed (Name, Card Number, CVV)to the payment processor
  • A payment processor then submits the information to the appropriate card association and checks for authenticity 
  • When authorisation is accepted, the issuing bank either approves or denies the transaction and then sends this information back to the payment processor
  • The payment processor then sends the response to the  gateway, and from there, it’s forwarded back to the website.
  • The money is then accepted by the merchant’s bank and starts processing to their account

How do I choose the right gateway for my business?

Aside from Payflex, some of the most popular gateways in South Africa include: Yoco, PayFast, PayGateOzow and Peach Payments.

When making decision about which gateway to use, some key factors to consider include:

  • Multi- currency acceptance
  • 24/7 availability
  • PCI Compliance & 3D Secure
  • Flexible Integrations
  • Faster Checkout
  • Fastest Setup Time
  • Support Different Kinds of Payments


There is no one-size-fits-all option when it comes to online payment gateways as each has its associated pros and cons. Remember, your chosen gateway has to satisfy both the needs of your customers and your business. It therefore has to offer fraud protection, support a variety of payment methods, be convenient to use, and of course, compatible with your platform.  

Ultimately, the best payment gateway for your company depends on your business’s unique needs. But the importance of choosing the right one cannot be understated.  Reputation is a huge part of eCommerce. And when it comes to your business’s payment solutions, make sure you provide a seamless customer experience.