What is the primary function of a payment gateway?

The primary function of a payment gateway is to authorize and process credit card payments for online transactions. Payment gateways act as an intermediary between the customer and the merchant's bank. When a customer makes a purchase online, the payment gateway encrypts the transaction information and securely transmits it to the payment processor or bank to facilitate the transaction. This ensures that payment data is handled safely, protecting sensitive information during the process.

The gateway verifies the transaction details with the bank and returns a response to the merchant, indicating whether the transaction has been approved or declined. This allows merchants to confidently accept payments, ensuring a smooth and secure transaction experience for customers.

While other functions mentioned in the options might be relevant in a financial context, they do not represent the core responsibility of a payment gateway as effectively as processing and authorizing transactions does.