A payment processor is a company that is chosen by the merchant to oversee all online payments made to the acquiring banks. It is vital to obtain the services of a payment processor in order to begin the processing of online payments through credit/debit cards and other payment options.
Payment processor explained
Small and newly formed online businesses usually go through a payment processor in order to obtain a merchant account to begin the processing of their online orders. As the businesses may have less credibility and status at the time of formation, it is advised to seek the assistance of a professional consultancy firm in order to acquire the services of a payment processor. With regards to offline businesses, a POS terminal will need to be obtained from either a third party or acquiring bank in order to process credit and debit card payments. There is no need for an offline business to go directly to a payment processor.
In order to open a merchant account, businesses are required to obtain approval after completing the necessary application forms. It is likely that the businesses have to present processing history to the acquiring bank in order to obtain their merchant account.
Most businesses that choose to opt for payment processors, such as PayPal, are able to do so without having to complete a long and complex procedure. PayPal allows individuals and companies to utilize a payment processor that is safe and efficient. The payment processor is able to accept or deny card payments as they are directly connected to the merchant banks thus payment processors have the ability to act on behalf of the merchant through the security of an internet platform.