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Payments

Payment gateway and processor

The gateway routes a transaction; the processor moves the money. Many products do both, which is why the terms blur.

A gateway takes a payment request from your system and routes it to the right acquirer or network. A processor handles the authorization, capture and settlement of funds.

Most modern providers bundle gateway, processing and merchant account together, which is why the words are used interchangeably. The distinction still matters when you run several providers, because the routing layer and the money layer can then belong to different vendors.

Occurly sits above all of this: it owns the subscription, the invoice and the dunning ladder, and routes the charge to whichever processor you use.

Related terms

  • Authorization and capture Authorization reserves funds; capture takes them. The gap between the two is where a lot of billing logic lives.
  • Settlement and payout Funds moving from the card networks to your bank account, usually in batches and net of fees.
  • Tokenization Replacing card details with a meaningless reference, so the sensitive number never reaches your systems.
  • PSP (Payment Service Provider) A provider that bundles gateway, processing and merchant services so a business can take payments without its own acquiring relationship.