What are payment processing services

A credit card transaction might seem as simple as a swipe, dip, or tap, but it involves multiple steps and players. Payment processing is how businesses complete credit card and debit card transactions. Payment processing services expedite card transactions, and payment gateways securely transmit data so money from a customer’s issuing bank can be transferred to a merchant’s account. All of this happens in seconds. The end result is a customer who successfully makes a purchase without using cash or a check—and a business that completes a sale.

What is a point of purchase

Point of purchase is when a customer initiates a purchase with a merchant and provides a method of payment, which can include using a debit or credit card, cash, check, or money order. Today, even more consumers are using digital payment methods to make in-store and online purchases. According to a 2020 Deloitte report, the value of digital transactions globally reached $4.1 trillion in 2019 and is expected to grow by 13 percent each year until 2023.

What is a payment gateway

A payment gateway is a tool that securely connects information that is sent through the payment processor from a customer’s bank to the merchant’s account. The payment gateway communicates a payment decline or acceptance, but it’s the processor that quarterbacks the transaction by seamlessly gathering card information from the customer’s issuing bank (credit card/debit card) to transfer to the merchant account.

What is a payment processor

Payment processors act as a shuttle, delivering information from the issuing banks’ credit card customers to merchant accounts, where accepted payments ultimately land. The payment processor validates card security and facilitates the transfer of payment, moving money from the issuing bank to the merchant account.

What is a merchant account

When a credit card transaction is processed and approved, the payment processing company facilitates the movement of money from the issuing bank to the merchant account. This bank account enables a business to accept credit cards, debit cards, and digital payments.

What is an issuing bank

The issuing bank is a financial institution associated with a customer’s credit card.