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Do you know ? How Payment Gateway works? Payment Gateways are software and servers that transmit Transaction information to Acquiring Banks and responses from Issuing Banks (such as whether a transaction is approved or declined). Essentially, Payment Gateways facilitate communication within banks. How to create Payment Gateway? Two Options: 1. User API’s of existing Payment Gateway OR 2. Create from scratch! (I like this option) From Where to start ? Thinking about payment gateway, that sounds simple at first, but there are actually three elements that come into play for taking those payments from customers and getting them into your own account: 1. A payment gateway 2. A merchant account 3. A payment processor Difference ? All three of these elements work together to transfer money from the customer to the merchant, but it helps to understand what each of them do throughout the process. See below picture for more understanding (Visualization) 1. Something about Payment Gateway ? A payment gateway is your doorway to making sales online. A payment gateway will allow you to charge your customer's credit/debit card with the purchase he/she makes online. Inshort, this authorizes you to take card payments directly from your website. You can call it mediator between the transactions that take place on your website and the payment processor. 2. Something about Payment Processor? They provide all the payment processing services used by an online merchant. The payment processor connects to both the merchant account and payment gateway, quickly passing information back and forth, keeping it secure and almost instantaneous for the end user. 3. Something about Merchant account? Merchant accounts are the types of bank accounts that authorize merchants to accept credit or debit cards payments online. These accounts are required if you want to use a payment gateway to process transactions from your website. You can read about MIDs on paypal , which is merchant IDs!