What Is a Payment Processor? Understanding Stripe, Worldpay, and the Rest
What Is a Payment Processor? Understanding Stripe, Worldpay, and the Rest
Whether you’re a small business or a high-risk merchant, understanding how payment processors work is essential. In this guide, we’ll break down what a payment processor does, how companies like Stripe and Worldpay fit in, and how to choose the right partner for your business.
What Is a Payment Processor?
A payment processor is a company that handles the technical side of credit card and debit card transactions. They transmit data between the customer’s bank, the merchant’s bank, and the payment gateway to make sure funds move securely and efficiently.
How It Works
- Step 1: A customer enters card details online or swipes at checkout.
- Step 2: The payment gateway encrypts and sends that information to the processor.
- Step 3: The processor connects to the card network (Visa, Mastercard, etc.) and verifies funds.
- Step 4: The merchant receives approval, and the funds settle into the business bank account.
Examples of Popular Payment Processors
- Stripe: Known for its simple API and eCommerce integrations.
- Worldpay: Offers global coverage and supports in-person and online transactions.
- Payoneer: Popular for international payments and freelancer transactions.
- High Wire Payments: Specializes in high-risk industries like CBD, hemp, and kratom with transparent pricing and direct banking relationships.
Payment Gateways vs. Payment Processors
While the terms are often used interchangeably, they’re not the same. A payment gateway is the software that captures and encrypts customer data, while the processor handles communication between banks. Think of the gateway as the “door” and the processor as the “messenger.”
Why PCI Compliance Matters
PCI DSS (Payment Card Industry Data Security Standard) is a global framework that keeps transactions secure. If you accept cards, you must process through a PCI-compliant partner to avoid penalties and protect customer data.
Choosing the Right Payment Processor
When comparing processors, consider:
- Pricing model (flat-rate vs interchange-plus)
- Supported industries (high-risk vs low-risk)
- Customer support and reliability
- Gateway compatibility and integration options
If you operate in a high-risk industry, traditional platforms like Stripe or Square may freeze your account without warning. That’s where High Wire Payments provides stability with bank-backed underwriting and custom pricing for industries like CBD, vape, and nutraceuticals.
Need a Reliable Processor for Your Business?
High Wire Payments helps high-risk merchants accept credit cards with transparent pricing, fast approvals, and stable banking partners.