Understanding online payment terminology

/Understanding online payment terminology
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Though you will find a variety of terminologies to describe online payments, these terms are not necessarily interchangeable, with each relating to a particular aspect of the online payment process or service.

Below is a list of the terms you may find:Prepaid Card

  • Payment processor
  • Payment provider
  • Payment gateway
  • Payment service or payment system
  • Merchant account

Generally these terms will refer to a company, service or application involved in the payment process.

 

Payment processor
The payment processor service ensures that a credit card has sufficient funds for payment. When this occurs, the funds are then authorised to be transferred to the merchant account. It updates the system status and transmits it back through the payment gateway to your website. Often the gateway and processor services are indistinguishable and are referred to as a single service.

Payment provider
The payment provider, otherwise known as the payment service provider, is the business which supplies and operates the processor or gateway services. Read more

Payment gateway
As the term implies, it is the gateway on the website for receiving the payment requests, which are then directed to the payment processor. Read more

Payment service or payment system
This is the term used by payment providers to describe different payment gateway options. These options will often have different capabilities and pricing structures. Read more

Merchant account
A merchant account is a holding account for receipt of credit and debit card transactions, prior to being transferred to your company accounts. Having a merchant account is essential to receive online payments, and must be set up through your payment provider. Once cleared, the funds will be transferred to your company account. Read more

2017-09-07T07:20:34+00:00