Payment Processor
Definition
A company or service that handles the technical and financial infrastructure for accepting payments from customers, including card processing, fraud detection, currency conversion, and fund transfers.
Why it matters
Choosing the right payment processor affects transaction fees, international reach, checkout conversion, and how quickly funds reach your account. A poor choice can cost significant revenue through fees or cart abandonment.
Example
A founder evaluates Stripe, PayPal, and Square for her online store. She chooses Stripe for its developer-friendly API, lower per-transaction fees at her volume, and seamless integration with her e-commerce platform.
Related terms
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