Payments
Payment processor
A payment processor handles card transactions between a merchant, the customer's bank and the merchant's account, authorising payments and settling funds. Processors charge a percentage of each transaction plus a fixed fee, and assume responsibility for fraud screening and dispute handling.
In plain terms: The company that takes card payments on your behalf and pays you the proceeds.
Why it matters
The processor relationship is a credit relationship: they pay you before disputes are fully resolved, so they manage that exposure with payout delays and reserves. Understanding this explains most of what new merchants find frustrating.
Read the full guideGetting paid