A payment processor is an electronic system that connects a shopper's bank with a merchant's bank to facilitate transactions. It gets the required information from the payment gateway to carry out the transactions.
Payment processors work as virtual cash registers as they let a store receive debit and credit card payments for its products and/or services. They quickly transfer the credit and debit card information to both the customer and merchant banks, which ensures quick payments. In case the provided payment information is not valid, the transaction fails.
The benefits that a payment processor brings to the table are:
- Enables brands to offer alternative payment options: Customers seek multiple payment options, especially when they pay online. Besides credit and debit cards, customers prefer to pay via mobile wallets, UPI, and other available payment options. Payment processors enable eCommerce businesses to offer payment alternatives to serve their customers in the best possible way.
- Enhances customer experience: Customers always expect to make payments in a jiffy. They get frustrated when this doesn’t happen and sometimes abandon the purchase. Payment processors ensure that transactions happen quickly to enhance customers’ shopping experience.
- Helps smoothen business operations: You can integrate a payment processor with your own system to make sure all your key departments, such as billing, accounting, customer support, etc., have the required details at their fingertips to carry out their tasks efficiently.