A payment processor is a company that facilitates payment transactions by handling the technical and operational aspects of moving funds between customers, merchants, and financial institutions. Payment processors manage authorization requests, communicate with card networks and issuing banks, perform fraud screening, and settle transactions by transferring funds to merchant accounts. They serve as the critical infrastructure connecting merchants’ payment systems with the broader payment ecosystem. Payment processors must maintain rigorous security standards and PCI DSS compliance to protect sensitive payment data as it flows through their systems during transaction processing.
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