The Difference Between a Payment Gateway and Payment Processor Explained

 

Are you a business owner looking to accept online payments from your customers? If so, then you’ve likely come across the terms “payment gateway” and “payment processor.” But what are payment gateways and payment processors, and how do they differ? This blog post from a provider of merchant services will explain the two services in detail. 

What is a Payment Gateway?  

A payment gateway is a secure system that facilitates online payments. It acts as an intermediary between your customer’s credit card or bank account, and your business account. When a customer submits their payment information at checkout, the payment gateway confirms that information with their bank or credit card company. Once confirmed, the payment gateway processes the transaction and forwards it to your business account.  

What is a Payment Processor?  

A payment processor is a service that manages transactions between merchants and customers. It handles everything from payment processing to calculating sales data. Most companies use third-party processors which allows them to accept various forms of payments including debit cards, credit cards, digital wallets, and more.  Some processors even offer additional features such as invoicing solutions or recurring billing options for subscription-based services.   

The Difference Between Payment Gateways & Payment Processors  

The main difference between payment gateways and processors is that payment gateways process payments while processors manage them. While both provide important services for businesses looking to accept online payments from customers, they are not interchangeable.   

In conclusion, it’s important for business owners to understand the differences between payment gateways and processors in order to make informed decisions about which services best meet their needs. By familiarizing yourself with both payment gateways and payment processors, you can be sure that all your customer transactions will be handled safely—and quickly—so you can focus on growing your business instead of worrying about managing its finances manually each day. 

 

Gulf Coast Merchant Services has been a leading provider of Point of Sale & Merchant Services in Pensacola, Florida and across the U.S. since 2005. The team at Gulf Coast Merchant Services is dedicated to bringing you superior service and the best-in-class POS Solutions & Payment Processing. 

Gulf Coast Merchant Services LLC 
180 E. Burgess Rd. Suite D 
Pensacola, FL 32503 
(850) 995-4414 
https://gulfcoastmerchantservices.com/