Back-End Processor

A back-end processor is a system, server, or set of infrastructure that handles the batching and settlement of funds between merchants, cardholders, and financial institutions. Back-end processors work with card networks like Visa, Mastercard, Discover and American Express to facilitate fund transfers, and work to verify the legitimacy of account balances, transactions, and the payment methods chosen.

Back-end processors also track, update, and store financial records in secure databases. This helps processors monitor and flag fraudulent transactions, report on chargeback trends, and remain compliant with industry regulations.