A payment gateway is a service necessary for accepting credit cards online using a shopping cart. In one form or another merchants use the online payment gateways to process online payments.
Payment gateways are usually affordable solutions that reside on top of your merchant account and facilitate the transfer of transactional data between the web shopping carts, merchant bank and customer’s credit card company.
In order to use a payment gateway you need to have a merchant account. Most merchant accounts also provide payment gateways or automatically set their clients with a third party payment gateway that the online shopping cart software uses to process payments.