Payment Gateways vs. Payment Processors: Which One Does Your Business Need?
Introduction
When you’re setting up payment options for your business, terms like “payment gateway” and “payment processor” start popping up. But what’s the difference, and which one do you actually need? Here’s a quick guide to help you figure it out.
What’s a Payment Processor?
A payment processor is the middleman between your business, the banks, and the card networks. It handles the behind-the-scenes stuff like authorization and settlement, ensuring that payments go smoothly from your customer’s card to your account.
What’s a Payment Gateway?
A payment gateway is the online equivalent of a card reader. It’s essential for e-commerce businesses, as it securely transmits card data to the payment processor and back, ensuring online transactions are safe.
Do You Need Both?
- If you’re brick-and-mortar only, a payment processor and a card reader will do.
- If you have an online store, you’ll need a payment gateway to handle the secure transmission of data.
The right combination of payment gateway and processor can streamline your payment process and keep transactions secure. Choose what fits your business model best, and you’ll be ready to accept payments smoothly.
