What is a Payment Gateway?

A payment gateway is a technique to process transactions electronically. Payment gateways provide the tools to process payments between customers, businesses, and banks.A payment gateway is a necessary part of the transaction between customer, business and the banking institutions that both are using. A payment gateway is used to facilitate electronic transactions. These are very safe, as it uses Encryption of payment and personal data.

Reference : http://www.scriptvenue.com/2012/05/what-is-a-payment-gateway/