Merchants (like a local government) are not permitted to send payment information directly to a payment processor. For this reason, Payment Gateways have been designed as intermediaries to ensure secure customer transactions and encrypt payment information before being transmitted. Payment gateways allow local governments to process payments online via credit card, debit card, ACH, or an alternative payment method and facilitate online transaction approvals.
When a citizen completes an online purchase using a local government website or a local government office, the first step toward verification occurs using a payment gateway. From there, the transaction data is sent to a payment processor. Then, if necessary, the transaction data is sent through the credit card network to the citizen’s credit card issuer for authorization. If approved, the data is transferred to a merchant account.
Payment gateways are ideal for easily and securely entering and authorizing credit and debit card payments. They provide the technology to securely capture and transfer the credit card information from a website to the merchant account.