Infrastructure
Payment Gateway
Definition
Payment Gateway the technology that securely transmits transaction data between a merchant's website/application and the payment processor. The gateway encrypts sensitive card data, routes transactions for authorization, and returns responses. Can be provided by the PSP (integrated) or operated separately (standalone). Examples include Authorize.net, Braintree, and NMI.
Related Terms
Payment Processor
A company that handles the technical aspects of processing card transactions, including routing authorizations, managing connections to card networks, and facilitating settlement. Some processors are also acquirers; others process on behalf of acquirers. The processor handles the technical plumbing while the acquirer handles the banking relationship and merchant underwriting.
Tokenization
Replacing sensitive card data with a non-sensitive token that can be stored safely. Tokens are useless if stolen - they can only be used by the merchant they were created for. Enables card-on-file functionality without storing actual card numbers. Reduces PCI scope significantly. Network tokens (from Visa/MC) offer additional benefits including automatic card updates.
Payment Service Provider (PSP)
A company that provides payment processing services to merchants, typically bundling acquiring, processing, and gateway services into a single offering. PSPs like Stripe, Adyen, and Checkout.com handle the entire payment stack, simplifying integration for merchants. PSPs may operate as PayFacs (aggregating merchants under their own MID) or facilitate direct merchant accounts with acquirers.
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