Payment Gateway

A payment gateway is the front door of payment processing. It is the technology layer that captures payment information from the customer — typically through a checkout page, embedded form, or mobile app — encrypts it, and securely transmits it to the payment processor for authorization. The gateway ensures that sensitive card data never passes through the merchant's servers in plain text.

Historically, payment gateways and payment processors were distinct companies with separate functions. The gateway handled the secure data capture and transmission (companies like Authorize.net, CyberSource), while the processor handled the actual transaction routing (companies like First Data, Worldpay). This separation added complexity and cost.

Modern platforms like Stripe, Adyen, and Braintree have largely merged the gateway and processor into a single integrated service. When you use Stripe Elements to collect card details on your checkout page, Stripe is simultaneously acting as the gateway (securely capturing the card data on their servers) and the processor (routing the charge through the card network). This integrated approach simplifies implementation and reduces points of failure.

The gateway layer is critical for security and compliance. PCI DSS requirements dictate how card data must be handled, and the gateway is the primary control point. By using a hosted or embedded payment form from your gateway provider, you can minimize your PCI scope — the card data goes directly to the gateway's servers and never touches your infrastructure.

For subscription businesses managing payment recovery, the gateway's capabilities matter. Features like 3D Secure authentication, network tokenization, and retry routing can all affect recovery rates. LostChurn works with the gateway APIs of 13 providers to submit retry attempts with optimal parameters, leveraging each gateway's specific features for maximum success.