The short answer
A payment gateway is the software that encrypts and transmits payment data from your checkout to the processor for authorization. It's the "pipe" — not the bank account (merchant account) and not the processor itself.
In plain English
When a customer enters their card number on your checkout, the gateway tokenizes it, encrypts it, and sends it to your processor. The processor routes it to the card network, the network routes it to the issuing bank, the bank approves or declines, and the response comes back through the same pipe. That pipe is the gateway.
With Stripe or Square, gateway + processor + merchant account are bundled. With traditional ISOs, you often pick them separately: Authorize.net as gateway, a different company as processor, and the acquiring bank underwrites the merchant account.
How it shows up in your business
- Most gateway switching doesn't require switching your merchant account. You can change gateways without losing history.
- Gateways charge a per-transaction fee ($0.05–$0.15 typical) on top of processor fees. Stripe and Square bundle it in their headline rate.
- NMI (Network Merchants Inc), Authorize.net, and Braintree are common standalone gateways. Stripe and Adyen have their own.
- Gateway-level features: tokenization vault, fraud scoring (Kount, Signifyd integrations), subscription/recurring engine, virtual terminal for phone orders.
Numbers to know
Typical standalone gateway fees: $10-25/month gateway fee + $0.05-$0.10 per transaction. Bundled (Stripe, Square): rolled into the ~2.9% + $0.30 rate. Some gateway + processor combos come out cheaper at scale once monthly volume passes ~$250k/month.
Why multi-brand operators care
Gateway choice determines what tokenization and subscription features you have across sub-brands. multiflow stays gateway-agnostic — we work with whatever gateway your processor is using (Stripe's own, Authorize.net, NMI, Braintree). The routing layer we add is above the gateway, not replacing it.