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Payment Processor

A payment processor shares and receives data from the card brands, acquirer, and gateway in order to process a merchant’s transactions.

What Does a Payment Processor Do?

The payment processor acts as the go-between for all other entities involved in a transaction.

  • Receives authorization requests from the gateway and submits them to the issuers via the brands
  • Receives authorization responses from the issuers via the brands and shares them with the gateway
  • Receives batches of transactions from the gateway for settlement, sends to the issuers via the brands
  • Receives retrieval requests and chargebacks from the issuers via the acquirer
  • Sends chargeback responses to the issuer via the acquirer

Also referred to as:

Third-party processor or third-party payment processor

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