What does a payment

processor do?

The payment processor is responsible for the actual transaction authorization and processing process. When a customer makes a payment, the payment processor takes care of verifying the payment information, checking for sufficient funds, and transferring the money from the customer's account to the merchant's account.
Here are some of the primary functions of a payment processor:

1. Payment processors work with card networks such as Visa, MasterCard, China UnionPay, Discover, American Express, JCB, Mir, etc. to authorize payment transactions.
2. Payment processors facilitate the settlement of transactions, ensuring that funds are transferred from the customer's account (card owner) to the merchant's account.
3. Payment processors employ various security measures and fraud detection techniques to prevent fraudulent transactions.
4. Payment processors reconcile the payments made by customers with the amounts deposited into the merchant's account.
5. Payment processors manage chargebacks and disputes, ensuring that merchants receive timely notifications and providing support in resolving chargeback disputes.

In summary, payment processors play a critical role in enabling merchants to accept electronic payments. The payment processor facilitates communication and authorization during online and offline transactions. The payment processor acts as a bridge between the merchant, the merchant's acquirer, the payment gateway, and the card network.