What is the difference between

a payment gateway and a processor?

A payment gateway and a payment processor are two distinct components of the payment ecosystem, but they work together to facilitate electronic transactions.

Here's an overview of their differences:
Payment Gateway:

1. A payment gateway acts as the interface between an e-commerce website or a point-of-sale (POS) system on the merchant acquirer's side.
2. Payment gateway securely captures and encrypts sensitive customer information like credit/debit card details and transmits them to the payment processor.
3. A payment gateway communicates between the merchant and the payment processor, allowing merchants to accept, decline, or initiate a refund for a transaction.

Payment Processor:

1. 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.
2. There are acquiring processors and issuing processors. Acquiring processors connect acquirers with the card networks (such as Visa, MasterCard, China UnionPay, Discover, American Express, JCB, Mir, etc.). Issuing processors connect card issuers with card networks.
3. In both cases, payment processors facilitate the authorization, clearing, and settlement of transactions on the acquirer's and issuer's side.
4. A payment processor complies with industry standards, such as PCI DSS Level 1, PSD2, and GDPR standards.
5. Payment processors provide acquirers with detailed reports on transactions, fees, chargebacks, and other relevant information to help acquirers moderate their merchant accounts and manage their finances.

In summary, a payment gateway is an intermediary that securely captures and transmits transaction data to the payment processor, while a payment processor is responsible for the actual transaction authorization and processing process.