What is a Payment Processor?
Millions of businesses around the world accept payments for their products and services online and offline every day. But few people really deeply understand how the modern payment system works and what happens when a client pays for their order. If you don't know how payment processing works, you as a business owner may face issues that you won't know how to solve one day. Therefore, let's understand what a payment processor is.
A payment processor is a service that companies use to set up the logistics of accepting payments from credit and debit cards. When initiating a transaction, the client transmits their bank card details. The payment processor sends this information to the payment networks such as Visa, Mastercard, or others and to the banks involved in the transaction. After receiving confirmation or rejection of the transaction, the payment processor sends this information back. Thus, it is an intermediary in the payment chain.
If you want to accept payments from any type of card, a pay processor is a must. You can choose any payment processor on the market. Some transaction processors offer the necessary equipment for merchants along with payment processing services. Other services only deal with payment processing. The choice depends on the type of business and the volume of payments.