What is a payment gateway?

What it means

A payment gateway is the digital version of the card reader at a checkout counter. It takes the card number, sends it off for approval, and comes back with “approved” or “declined.”

You do not build this yourself. Your website builder or store plugin connects to a gateway company, and that company handles the sensitive part. The card number goes to the gateway, not to your website.

Familiar names include Stripe, PayPal, Shopify Payments, Squarespace Payments and Wix Payments.

How it works

1. A customer enters card details at checkout.
2. The gateway encrypts the details and sends them to a payment processor.
3. The processor passes the request through the card network (Visa, Mastercard and so on) to the customer’s bank.
4. The bank approves or declines, and the answer comes back to your checkout in a few seconds.
5. Approved money is collected, the fee is taken out, and the rest is paid out to your bank account on a schedule.

Technically the gateway, the processor and the merchant account (where your money lands first) are different roles. Today most small sites use one service that bundles all three, so you see one fee and one dashboard.

Why it matters when you build a site

Fees on every sale. Most gateways charge a percentage plus a fixed amount. At 2.9% + $0.30, a $50 order costs you $1.75 in processing.

Builder fees on top. Some platforms add their own transaction fee, either on lower plans or only when you use an outside gateway. That is separate from processing.

Plan requirements. Some builders only let you take payments on higher plans.

Security. A hosted gateway keeps card numbers off your server, which cuts your security burden a lot.

Payouts and disputes. The gateway decides when your money arrives and handles chargebacks, which happen when a customer disputes a charge with their bank. Read the payout schedule and dispute process before launch, not after your first refund request.

How the big builders handle it

Details from the platforms’ own pages:

• Shopify lists 2.7% + $0.30 on Grow and 2.5% + $0.30 on Advanced. If you use a third-party gateway instead of Shopify Payments, Shopify adds 2% (Basic), 1% (Grow), 0.6% (Advanced) or 0.2% (Plus) on top of that gateway’s own fees.
• Squarespace charges 2.7% + $0.30 on Plus, 3.2% + $0.30 for premium cards on every plan, and ACH bank payments at 1.5% on Basic or 1.0% on higher plans.
• Wix says it supports “more than 80 payment options worldwide.” Online payments need the Core plan or higher.
• Hostinger says it charges no sales commission on store purchases. Gateway fees still apply.
• AI builders. Bolt added a Stripe integration in October 2025; the fees are Stripe’s own.

Common mistakes

• Comparing plan prices only. On a busy store, processing and transaction fees can cost more than the plan.
• Forgetting premium-card rates. Rewards and corporate cards often cost more to accept.
• Using an outside gateway on Shopify without doing the math. The extra 0.2% to 2% applies to every sale.
• Skipping a test order. Run a real or test-mode purchase before launch, including the confirmation email.

Related terms

• Transaction fees: the builder’s cut, separate from processing.
• SSL certificate: what puts the padlock on your checkout page.

Comparing store platforms? See our best builders for online stores and Squarespace vs Shopify.