There are many different players involved in the ecosystem of payment processing. From a cardholder’s point of view it seems very simple and quick but it actually is quite complex.
- Cardholder: Makes a purchase from the merchant, entering their information and authorizes the initiation of the transaction
- Payment Gateway: Forwards transaction information directly from cardholder to payment processor
- Processor: Facilitates the transaction information from the payment gateway to the card network
- Card Network: The network routes the transaction information to the issuing bank to receive the bank’s authorization
- Issuer: Receives and verifies the transaction information; if the credit or debit funds are available, the issuer then sends an authorization code for the transaction back to the card network
- Card Network: Receives the authorization approval and forwards the authorization to the processor
- Processor: Receives the issuer’s authorization approval from the card network, then forwards that information to the payment gateway
- Payment Gateway: Receives the authorization approval from the processor and sends it to the merchant to complete the transaction
- Merchant: Receives the authorization, fulfills the order, and batches the transaction information for submission to the Acquirer
- Acquirer: Receives the batched transactions at the end of the day, then deposits an amount into the merchant’s account minus applicable fees or reserve requirements
