What Is a Payment Gateway and How Does It Work? 2025 Guide

If you run an e-shop or plan to sell online, you've probably come across the term payment gateway. In this guide, we'll explain what it is, how it works, and what to look for when choosing one.

What is a payment gateway?

A payment gateway is a technology that processes online payments between a customer and a merchant. It acts as a digital intermediary — it receives payment details from the customer, verifies them, and ensures the transfer of funds to the merchant's account.

Without a payment gateway, e-shops couldn't accept card payments, mobile wallets, or bank buttons. It's the fundamental building block of any online business that wants to accept payments securely and automatically.

Steps of a payment through a gateway

1. Customer selects payment method — at checkout, they click card payment, Apple Pay, Google Pay, or bank button.
2. Redirect to payment gateway — the customer is securely redirected to enter their payment details.
3. Encryption and verification — the gateway encrypts the data and sends it to the customer's bank for verification.
4. Authentication (3D Secure) — the bank verifies the customer's identity via 3D Secure.
5. Approval or rejection — the bank approves or rejects the transaction and the response flows back to the e-shop.
6. Confirmation and settlement — the customer sees confirmation, the merchant receives notification, and funds are credited (typically within 1–2 business days).

What payment methods does a gateway offer?

How much does a payment gateway cost?

Most payment gateways work on a percentage fee per transaction model. This means you don't pay a fixed monthly fee, but a small percentage of each successful payment — typically between 0.9% to 2.5% of the transaction value.

Some gateways also charge monthly fees or setup fees. When choosing, compare total costs, not just the percentage rate. For example, Payout offers fees starting from 0.9% with no hidden monthly charges.

How to choose a payment gateway for your e-shop?

1. License and regulation — Does the gateway have an NBS license? A regulated gateway means higher security for your funds.
2. Supported payment methods — Does it offer all the methods your customers use? Local bank buttons are crucial for the Slovak market.
3. Integration speed — How quickly can you connect? The best gateways offer ready-made plugins for WooCommerce, Shoptet, and PrestaShop.
4. Customer support in your language — When something goes wrong, you want help in a language you understand.
5. Transparent fees — No hidden setup fees, monthly minimums, or inactivity charges. Pay only for actual transactions.