While from a customer’s perspective they complete a few steps prior to paying, there’s actually a lot more happening behind the scenes than they realise. Namely, there are various key players involved in different aspects of the payment process. Let’s take a look at who these parties are and what they do:

Payment service provider, or the payment processor – is a third-party company that provides the payment processing services to merchants, such as the payment gateway, card issuing, risk and fraud management solutions, acquiring and global payment methods, among other things.

Merchant – this is any party who sells goods and services, through an online and/or in-store shop.

Customer, or cardholder – the individual who initiates the purchase of a merchant’s good or service. 

Issuer, issuing bank or card issuer – a bank or other financial institution that issues or helps issue payment cards to customers on behalf of the card schemes. When a customer makes a payment, the issuer transfers the funds through the card schemes to the acquirer. Essentially, they verify that the cardholder has sufficient funds to cover the transaction and that the account is valid (among other security checks).

Acquirer, acquiring bank or acquiring member – the financial institution that processes card payments on behalf of merchants. One of their main roles is to securely route the card payment data on to the card schemes (more on this below) for authorisation by the issuer.

Payment gateway – the technology used by merchants to authenticate and securely transfer payment data between the acquirer, issuer and card schemes. Once the payment has been authorised and approved by the acquirer, the payment gateway sends a verification message back to the merchant. 

Card schemes – the party linking the acquirer to the issuer, so that card transaction information can be passed between the two as part of the authorisation step (we’ll touch on this later). Well-known card schemes include Mastercard, Visa, American Express, Discover and UnionPay.