How does the payment-processing industry function end-to-end?
Payments
Asked by Question Bot12/Sep/20141 answer
1 Answer
F
Faisal Khan
Answered 12/Sep/2014
The term Payments Processing is a pretty wide term, and if you take a look at the world, there is more to payments processing than just cards.
As others have pointed out, payments-processing surely processes credit/debit cards but that would include a multitude of players, the issuing bank, the acquiring bank, the payment gateway, the payments facilitator, the card schemes.
All these are players in the payments-processing industry.
Just within the US, you can have other teams for payment processing. For example ACH (Automated Clearing House) is a from of payment processing. So is Check21. etc.
The industry overall (worldwide) has a multitude of names and nomenclature varies.
The diagram shows (from a perspective of a commercial bank) various different segments within the payments processing industry.
The gist of any payment processing segment is to essentially adhere the following (yet simple) two slides:
and secondly the bank in itself...
There is now a caveat to the above statement, and that is Bitcoins, but more or less, a bank is required.
So for someone to say they are associated with payments-processing or the payments industry, they are touching a single facet or multiple facets of the payments ecosystem. They could be one or all of the following (the list is exhaustive, but the general heads are):
I wrote a detailed answer on the same subject which you may wish to read: Faisal Khan's answer to How does the payments ecosystem work? What does the payments workflow look like, from the merchant’s card payment to the acquirer? What are the roles of each of the main firms in the space, like First Data, PayPal, Neteller, Square, Visa, etc.?
As others have pointed out, payments-processing surely processes credit/debit cards but that would include a multitude of players, the issuing bank, the acquiring bank, the payment gateway, the payments facilitator, the card schemes.
All these are players in the payments-processing industry.
Just within the US, you can have other teams for payment processing. For example ACH (Automated Clearing House) is a from of payment processing. So is Check21. etc.
The industry overall (worldwide) has a multitude of names and nomenclature varies.
The diagram shows (from a perspective of a commercial bank) various different segments within the payments processing industry.
The gist of any payment processing segment is to essentially adhere the following (yet simple) two slides:
and secondly the bank in itself...
There is now a caveat to the above statement, and that is Bitcoins, but more or less, a bank is required.
So for someone to say they are associated with payments-processing or the payments industry, they are touching a single facet or multiple facets of the payments ecosystem. They could be one or all of the following (the list is exhaustive, but the general heads are):
- Bank
- Gateway
- Network
- Processor / Aggregator
- Exchange
I wrote a detailed answer on the same subject which you may wish to read: Faisal Khan's answer to How does the payments ecosystem work? What does the payments workflow look like, from the merchant’s card payment to the acquirer? What are the roles of each of the main firms in the space, like First Data, PayPal, Neteller, Square, Visa, etc.?