An integrated payment gateway allows you to keep the user at your website during the purchase. Non-hosted payment gateway providers allow for integrating via APIs. The pros are that you have full control over the transactions at your website.
A payment gateway is a merchant service provided by an e-commerce application service provider that authorizes credit card or direct payments processing for e-businesses, online retailers, bricks and clicks, or traditional brick and mortar. The payment gateway may be provided by a bank to its customers, but can be provided by a specialised financial service provider as a separate service, such as a payment service provider.
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