Payment Processor

A payment processor moves the money in a card payment. It works with the card network, the customer's issuer, and the merchant's acquirer to authorize the payment and settle the funds. The payment gateway collects the card details, and the processor moves the money.

What the processor does

• It sends the authorization request to the issuer and returns the approval or decline.
• It runs settlement, so funds move from the issuer through the acquirer to the merchant.
• It charges the processing fee, which includes interchange, network fees, and the processor's margin.
• It produces the records that let you match payments to payouts.

Processor vs gateway vs acquirer

• The gateway collects the card data at checkout.
• The processor works with the banks to move the money.
• The acquirer is the bank that holds the merchant account and receives the funds.

Stripe does the gateway and processor jobs and manages the acquiring banks for you, so you deal with one provider.

Why it matters

Your processor sets your cost per payment, how fast you get paid, and which payment methods you can accept. It takes its fee before the money reaches you, so the amount you receive is less than the amount charged. Track that gap so your revenue numbers match what you keep.