Payment service providers partner with acquiring banks and their payment processors to offer merchants the capability to accept payments.
The PSP sends (via the payment gateway) the transaction information, initiated by the shopper with the merchant, to a payment processor used by the merchant’s acquiring bank.
How does payment processing work?
A cardholder begins a credit card transaction by presenting his or her card to a merchant as payment for goods or services. The merchant uses their credit card machine, software or gateway to transmit the cardholder’s information and the details of the transaction to their acquiring bank, or the bank’s processor.
What is a payment processing company?
A payment processor is a company (often a third party) appointed by a merchant to handle transactions from various channels such as credit cards and debit cards for merchant acquiring banks.
What is payment network?
A payment network is the intermediary between all of the various elements that comprise a transaction, from the cardholder all the way through to the settling of transaction funds.
How does payment gateway make money?
Payment gateway accordingly sends a message to the merchant. The banks settles the money with the payment gateway and the payment gateways settles the money to the merchant. With the rise of online banking, individuals also needed to make transactions easily. Payment gateways opened the door for that.