The Difference Between Payment Processor and the Payment Gateway

Being in the market for online payments gateway services in Qatar, or any other country for that matter, you must have come across all sorts of terms that sounds complicated and make little sense to you. Two of these terms would be payment gateways and payment processor. You must have seen these terms being used interchangeably when in fact, they do have a difference.

First of all; there are four parties involved in every credit card or plastic currency transactions:

• The Merchant 
• The Customer
• The acquiring bank that processes the merchant accounts.
• The issuing banks to which the credit card used by customers belongs to. 

Both payment processor and payment gateway services play an important role when they accept payments online.

The Payment Processor:

To accept payments online through the cards and multinational currencies, you will need to set up an account with a merchant processing service like PaymentsMe. The payment processor carries out the transaction by transmitting information between:

• You, the merchant or the e-commerce business
• The issuing bank that issued the customer’s credit/debit card
• Acquiring bank that accepts payments online on your behalf

A payment processor also provides credit card machines and other equipment used to accept payments online through credit card.

The Payment Gateway:

An Online Payments gateway service validates the payments for e-commerce websites. You may think of it as an online point-of-sale terminal/portal for your business. Not all merchant account services offer you the payment gateway so make sure to ask your merchant account service about their payment integration gateway. An online payment gateway service can reduce errors, reduce transaction processing time and facilitate the interaction between customers and merchants.

Online payment gateway services are advisable to the e-commerce business instead of a simple merchant account. They also help businesses to effectively manage the recurring payments, while securing the customers’ financial details.