The short answer
A payment gateway is the technology that securely carries an online card payment from your checkout to the processing networks for approval. If you sell online you are using one, but you rarely need to buy one separately: modern platforms like Stripe and Square bundle gateway, processing, and deposits into one published rate.
What Does a Gateway Actually Do?
When a customer hits pay, the gateway encrypts the card data, carries it to the processor and card networks for authorization, and returns the approval or decline to your site in about two seconds. It is the online equivalent of the card terminal on a counter: the secure pipe, not the bank account.
The confusion exists because the pipe used to be sold separately from the processing and the merchant account. Legacy setups still work that way: a gateway like Authorize.net at its published $25 a month, layered on a separate merchant account. Modern platforms collapsed the stack.
What Do the Two Models Cost?
Published pricing makes the comparison concrete.
| Bundled (Stripe-class) | Separate gateway plus merchant account | |
|---|---|---|
| Structure | Gateway, processing, deposits in one | Gateway layered on your own merchant account |
| Published pricing | Stripe: 2.9% plus 30 cents online, no monthly fee | Authorize.net: $25 a month plus 10 cents per transaction on gateway-only plans, plus your merchant account's rates |
| Setup | Minutes | Merchant account underwriting plus gateway configuration |
| Best fit | Most online sellers, especially under $50,000 a month | High volume on interchange-plus accounts; specialized needs |
| Key limitation | Flat-rate pricing at scale | Two vendors, two contracts, two support desks |
When Does a Separate Gateway Make Sense?
Run the crossover: an online store doing $80,000 a month on Stripe's published 2.9% plus 30 cents pays roughly $2,470 monthly. The same volume on an interchange-plus merchant account, with wholesale interchange near 2% online per the published tables plus a thin markup, plus a gateway-only plan at the published $25 and 10 cents per transaction, can land several hundred dollars lower. Below roughly $20,000 a month, the bundled platform's simplicity is usually worth more than the spread.
Separate stacks also win for specific needs: multi-processor routing, high risk categories the bundled platforms exit, level 2 and 3 B2B interchange data, or a POS and online mix already living on a merchant account.
How Do You Choose Without Overbuying?
Four questions settle the gateway decision.
- Under $20,000 a month online: use the bundled platform and move on
- Over $50,000 a month: price an interchange-plus account with a gateway against your published flat rate
- High risk category: the decision is made for you; specialized acquirer plus compatible gateway
- Already carrying a merchant account for in-person sales: add the gateway to it rather than splitting volume across providers
Commonly Asked Questions
- Is Stripe a payment gateway?
- Stripe includes a gateway but sells the whole stack: gateway, processing, and payouts at its published 2.9% plus 30 cents online rate. That bundling is exactly why most sellers never buy a standalone gateway.
- What does a standalone gateway cost?
- Authorize.net's published plans run $25 a month, with a gateway-only option at 10 cents per transaction on top of your merchant account's processing, or an all-in-one at 2.9% plus 30 cents that mirrors bundled-platform pricing.
- Do I need a gateway for in-person sales?
- No; the terminal fills that role. You need gateway capability only when card data travels over the internet: ecommerce, invoicing with online pay, subscriptions, or keyed virtual-terminal payments.
- Can BatchOut set up the whole online stack?
- Yes. BatchOut matches the merchant account, gateway, and POS so online and in-person volume land in one place, priced on interchange plus where volume justifies it rather than defaulting to flat rate.
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