What is a payment processor?
A payment processor is a company which handles the technical execution of payment transactions. It connects merchants, acquirers, card networks, and issuing banks to authorise, capture, and settle payments.
What does a payment processor do during a transaction?
It receives transaction data from the gateway, routes it through the card network to the issuer, returns the approval or decline response, and manages the flow of funds during settlement.
How does a processor differ from an acquirer?
The processor handles the technical infrastructure, while the acquirer manages the merchant relationship and financial settlement. In many cases, the same provider performs both roles.
Why are payment processors important?
They ensure transactions are completed quickly and securely. Without processors, merchants would not be able to connect to the broader payments network.
What factors should merchants consider when choosing a processor?
They consider reliability, approval rates, supported payment methods, geographic coverage, pricing, and integration options.