Payment gateway processes the credit card data securely between the customer and the merchant and also between the merchant and the payment processor. It is like a checkpoint that protects against attempting to gather personal and financial information from customers and also acts as a mediator between the merchant and the sponsoring bank.

The following steps describe how to setup payment gateway in Magento −

Step 1 − Login to your Magento Admin Panel.

Step 2 − Go to System menu and click on the Configuration option.

Step 3 − Next you will see some list of options on the left side of the page. Scroll down and go to the Sales section and click on the Payment Methods option.

Step 4 − Under the Payment Methods section, expand the PayPal Payment Gateways option. It provides two types of payment gateway methods; one is Payflow Pro (Includes Express Checkout) and Payflow Link (Includes Express Checkout). Click on the Configure button to enter details for Payflow Pro and Payflow Link options respectively.

The Payflow Pro option is a customizable payment gateway, which can be used with merchant account to process credit card transactions. It does not need PayPal account as they can enter their credit card information directly on site and you need to add API credentials in Magento admin panel. It is also used to process PayPal Express Checkout (it allows customers to pay by credit card or from the security of their personal PayPal accounts) transactions.

Under Payflow Link option, once the customer decides to checkout, the checkout process is carried out on PayPal site. It is often called as hosted payment gateway that keeps the customer on your site by providing fast and easy way to add transaction processing to your site.