What is a Payment Gateway? Definition, Benefits and Advantages

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The ease of paying for orders or purchases through online store websites certainly doesn't just come. In fact, buyers can enjoy this convenience because of the existence of a payment gateway. Do you know what a payment gateway is?

With the existence of a payment gateway system, business people can manage payment and sales matters more easily. So, for those of you who are going to create a business website, online shop, or e-commerce, it's important to make sure that you choose the best payment gateway in your country.

If decades ago you still used physical money in transactions, now you don't have to do that. As technology advances, you only need to use a payment gateway in a transaction. The following is an explanation of the payment gateway. Let's find out together what a payment gateway is, the benefits and advantages that users can get.

What is a Payment Gateway?

What is a Payment Gateway

Broadly speaking, a payment gateway is a form of transaction system that has the task of authorizing a transaction process through e-commerce. When transacting online, we certainly expect an easier and safer payment process. 

Process transactions in payment gateway technology can be done in various ways, starting from credit transactions, debits, bank transfers, or other types of direct payment systems such as: e-wallet, direct debit, and others.

With internet technology, you can apply payment gateways for online shopping activities in the global market. Payment gateway technology allows manufacturers to easily accept payments from around the world.

One thing that is quite unique about payment gateway technology is that not only banks can provide this system, but non-banks can provide this system to validate and authorize transactions between merchants and consumers.

It feels like PayPal is no longer foreign to our ears, especially nowadays more and more people are making payments digitally. Payment using PayPal certainly makes it easier for people to transact even in various countries. Well, PayPal is an example of a payment gateway.

So, what exactly is a payment gateway? Payment gateway is a medium that can be used for digital or online transactions. The media is provided by e-commerce application services. With a payment gateway, website or online shop owners can process credit cards or other payments that support the running of a business.

We can also interpret what a payment gateway is as an online transaction system that functions to authorize the payment process. Thus enabling buyers to make payments via bank transfer, using a credit card, or various other payment options.

Check the domain to ensure the availability of a unique domain name that you will use for your online store or business website. There are several supporting systems for the payment gateway system, including the following:

  • An address verification system, which is an automatic invoice verification system to the collector according to existing data including telephone numbers, credit cards, and others.
  • The security code is a system that only allows transactions to be completed through a registered billing address

3D secure password, which is a layered security system to ensure that only the owner of the billing address can make transactions

Benefits of Using a Payment Gateway

So, after knowing what a payment gateway is, now is the time to find out what are the benefits of this one technology. As we know that payment provides ease of transaction. However, there are a number of other benefits of payment gateways, including:

1. Transaction Process Can Run Faster, Practical, and Flexible

The benefit of the first payment gateway is the transaction process. Where every transaction that buyers or customers make can run faster, more practical, and more flexible.

Before payment gateways appeared, most online shops used bank transfers for transactions. However, this method turned out to be quite troublesome. How come? Buyers have to save proof of payment and then they have to show it to the seller.

Transactions made between different banks of course also require the buyer to incur additional fees. It is not impossible that this will discourage potential buyers so that in the end they decide not to make a transaction.

Example payment gateway Indonesia allows online sellers to have all bank accounts in Indonesia. This means that it is more likely that buyers will make transactions. With just one bank account, they can link it with a payment gateway so they can send or receive funds for various transactions.

This of course makes transactions not only run quickly, but also become more practical and flexible. Where each buyer can choose a payment method according to their individual preferences.

2. Guaranteed Security and Minimizing Crime

The rise of cybercrime has made people worry about online transactions. However, the Indonesian payment gateway is here as the best solution that can guarantee the security of every transaction that occurs in online stores or e-commerce.

Through layered security, cyber crimes can be prevented. So that the payment gateway will be very useful for all parties involved in the transaction, especially the buyer. Any data or information that they share in making payments will be kept safe. Know what types of cyber crime are so you can be more careful in your activities online, not just when shopping.

3. Transfers from Various Types of Accounts

Knowing what a payment gateway is and its benefits will increasingly make business people aware of the importance of using this one system. Another benefit of payment gateways is transfers from various types of accounts. That means transactions from different banks are not a problem.

Neither sellers nor buyers only have multiple bank accounts, which of course would be so inconvenient. They can still transact using the same account.

4. Easier Payments and Purchases Recap

Knowing that payment gateways provide benefits in the recap process of payments and purchases will further help you understand what a payment gateway is, right? Money received by sellers digitally will certainly make it easier to record data.

In other words, business owners or sellers do not need to write reports manually because the data is recorded clearly. So they can access transaction history easily. Real-time statistical data makes it easier to record finances so there will be fewer recording errors.

Advantages of Using a Payment Gateway

The advantage of using a payment gateway will further complement your understanding of what a payment gateway is. What are the benefits that users can get?

Here are some of the advantages of using a payment gateway:

1. No Trouble for Customers

Who doesn't want every business to run quickly and easily? Even when buying only products, each individual does not want to bother. Of course, this can be realized with what a payment gateway is.

Customers do not need to confirm the payment they made with the automatic confirmation feature. Sellers will also get real-time notifications on the dashboard.

2. Unlimited Transactions

Already know what a payment gateway is but still unsure about which one to choose? Did you know that this one system provides higher profit opportunities because there are no transaction limits?

Without any restrictions or limits, anyone can make transactions repeatedly up to thousands of times every day. This proves that payment gateways are not only beneficial for businesses but also buyers.

3. Convenience for Customers to Make Payments

The existence of a payment gateway is very beneficial, including for customers or buyers where they can make payments easily. There are even a wide selection of payment methods that can be adjusted to each individual's needs and desires.

For example, those who don't want to be bothered with transactions using bank transfers can pay for their orders by selecting payment using a virtual account. Owners and active credit card users can of course take advantage of the available credit card payment options.

In other words, every buyer is free to choose a payment method, including through retail outlets such as Alfamart.

4. Guaranteed Payment Transactions

In general, payment gateway providers equip their systems with excellent protective components. Thus, customer data will be guaranteed so that it remains safe even if they have to share it with unknown parties, in this case sellers or online store owners.

5. No Physical Store Required

Who says that business is hard to grow? In today's digital era, every business can grow through online presence and branding.

In fact, there are so many media that will support the digital marketing strategy that they apply for business benefits. To be able to achieve business goals such as increasing sales, you don't even need to have a physical store. That means, you can still run a business without having to take care of a physical store.

6. Wider Reach

Payment gateway comes with a wider range. The point is that those who use the system can reach potential buyers more broadly, even to every corner of the country.

It also allows you to expand your business overseas, especially if you choose a payment gateway that allows global transactions.


Payment gateway is a very important technology in an online transaction. Apart from being more efficient, this technology makes the transaction process safer.

Are you ready to earn big profits through increased sales? If so, now is the time to get to know more about what a payment gateway is and choose one of the best providers.

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