A payment gateway integration is a 3rd party entity (or software) that processes payment information entered by a customer on an e-commerce website. The gateway processes these payments on behalf of the e-commerce merchant.

When a customer pays for merchandise using a credit/debit card, netbanking or any other prepaid mechanism, the payment gateway providers identifies the issuing bank of the card or connects directly with the online bank (in case of netbanking) to complete the payment. Once successful, they take the customer back to the e-commerce website.