Difference between payment gateway and payment processor

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05/18/2022 | Chili Cup, Payment gateway

The E-commerce world can be a mistery to some. And with good reason! There are a lot of concepts to learn, platforms and tools to use.

When you are digitizing your business and expanding to sell online, it’s important that you know the difference between a payment gateway and a payment processor They both work hand in hand during a transaction, but they are different and can not be traded!

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A payment processor is in charge of communicating the information of the transaction between the seller, the issuing bank and the receiving bank. Its job is to mantain security on the payment process, from user authentication to the to the settlement of funds. For those who sell in person, it also supplies credit card machines and equipment to accept payments.

It is important to clarify that a merchant account is needed, along with a service provider, and that you need a point of sale terminal.

On the other hand, a payment gateway is the intermediary between the buyer and seller, facilitating transactions in which there is no need for a card. You could say that it is a point of sale terminal for an online business.

By not having a customer or card physically present, the identification process is more delicate; therefore, the payment gateway has the task of validate the digital data against malicious threats, to ensure payments are safe (for both the buyer and the seller).

Do you want a payment gateway for your business, but are not sure how it will help you?
We will help you!