What is an example of a payment processor?

Services like PayPal, Stripe, Square, Shopify Payments, QuickBooks Payments, and Payment Depot are all examples of payment processors.

Is PayPal considered a payment processor?

Yes, PayPal is considered a payment processor. The company also functions as a payment gateway, but it is not an acquiring bank.

What is the difference between a bank and a payment processor?

An acquiring bank is a financial institution that serves as a custody of merchantsâ funds. In contrast, a payment processor strictly relays transaction information between merchants, acquirers, and issuers. In other words, payment processors are not banks and do not hold funds.

Why do I need a payment processor?

All merchants need to use a payment processor if they are to accept credit or debit payments from cardholders and ultimately receive funds once they are settled.

Who uses payment processors?

Merchants use payment processors to accept card, mobile wallet, and bank-to-bank payments from customers.

How do payment processors make money?

Payment processors make money by charging setup fees upon account creation and transaction-based processing fees that are levied whenever a merchant submits a payment for processing. Some payment processors also assess monthly or annual fees and may apply surcharges on exchange rates for cross-border payments. Finally, processors may charge additional fees for value-added services, such as fraud prevention tools or recurring billing services.

Author

Dado Kalem

Dado is the Director Of Operations at Chargebacks911. After joining Chargebacks911 in 2012, Dado played an integral role in the early growth and development of the company as a member of our Production, Client Relations, and Setup teams. He’s now focused on building relationships with high-risk merchants and payment processors.