# What is a payment gateway?

URL: https://www.paydude.io/resources/what-is-a-payment-gateway
Type: Guide
Published: 2026-09-02 · Updated: 2026-09-02
Summary: A payment gateway captures card details at checkout; a processor moves the money. What each does, and why most providers now do both.

**A payment gateway is the component that captures card details at checkout and passes them securely to the processor.** It is the software layer between your checkout page and the payment rails. It does not move money itself — that is the processor's job.

## Summary

The gateway captures and encrypts card details; the processor moves the money. Modern providers bundle both, so you rarely buy a gateway separately. A good gateway keeps raw card data off your servers entirely. That tokenisation is what keeps your PCI compliance burden small.

## What the gateway actually does

1. **Captures the card details** — Usually inside an iframe or hosted field, so the raw card number never touches your server.
2. **Encrypts and tokenises them** — The card data is replaced with a token — a reference you can safely store and charge later.
3. **Sends the authorisation request** — The gateway passes the transaction to the processor, which routes it through the card network to the issuing bank.
4. **Returns the result** — Approved, declined, or requires additional authentication such as 3D Secure.

## Gateway versus processor versus acquirer

**Who does what**

| Role | Responsibility |
| --- | --- |
| Gateway | Captures and encrypts card details at checkout |
| Processor | Routes the transaction through the card networks |
| Acquirer | The bank that receives and holds the funds |
| Issuer | The customer's bank, which approves or declines |

Traditionally you assembled these separately: a gateway from one vendor, a merchant account from an acquiring bank, and a processor connecting them. Modern providers bundle all four behind one signup, which is why you can start taking payments the same day.

> **Why tokenisation matters to you:** If raw card numbers never reach your servers, the vast majority of PCI DSS requirements simply do not apply to you. The gateway is what makes that possible — see [PCI compliance](https://www.paydude.io/resources/what-is-pci-compliance).

## When you would still buy one separately

Standalone gateways still exist, and there are two reasons to use one. You already hold a merchant account through an acquiring bank and only need the software layer. Or you want to route transactions across several processors — see [payment orchestration](https://www.paydude.io/resources/what-is-a-payment-orchestration-layer) — in which case the gateway sits above all of them.

For most businesses neither applies, and a bundled provider is simpler and cheaper. Compare what each charges in the [processor fee comparison](https://www.paydude.io/resources/payment-processor-fee-comparison).

**Gateway included, nothing extra** Paydude bundles the gateway into one published rate with no monthly fee. — [See pricing](https://www.paydude.io/pricing)

## Frequently asked questions

### What is the difference between a payment gateway and a payment processor?

The gateway captures and encrypts card details at checkout and passes them on. The processor routes the transaction through the card networks to the customer's bank and back. Most modern providers bundle both into one product, which is why the terms are used interchangeably.

### Do I need a separate payment gateway?

Usually not. Stripe, Square, Adyen, Paydude and similar providers include the gateway. You would only source one separately in a traditional setup where you already hold your own merchant account through an acquiring bank.

### Does a gateway store card details?

A good one does not store raw card numbers on your servers at all. It tokenises them, returning a reference you can charge later while the actual card data stays inside the provider's PCI-compliant environment. That is what keeps you out of the strictest PCI scope.

### What does a gateway cost?

In a bundled provider it is included in the per-transaction rate. Standalone gateways typically charge a monthly fee plus a small per-transaction amount — Authorize.net's all-in-one plan, for example, is $25 a month plus 2.9% + 30¢.