Acquirer, Processor, Gateway: Who is who?

What are the differences between an acquirer, a payment gateway, and a payment processor? This is a common question that is more and more difficult to answer in the realities of the modern merchant services market. Technically, a credit card acquirer is a bank, whose risk department decides whether to issue merchant accounts to applicants. An acquirer also assumes financial liability and risk, related to chargeback handling, as well as to merchant and consumer fraud. A processor can be called a technical arm of an acquiring bank, as it handles the technical side of transaction processing. A gateway, in its turn, is an entity, providing merchants with unified access to payment processors (in the general case, many of them). In reality many businesses fulfill different kinds of functions “all-in-one”, especially after emergence of new entities called payment facilitators.

If you need more information on responsibilities and functions of merchant acquirers, payment processors, and payment gateway providers, read the respective article on Paylosophy.

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