Payments 101 -

Payments 101 Understanding Payment Gateways, PSPs, and Acquirers

📌 What Is a Payment GatewayGateway gateway A service that authorizes and processes card payments for online merchants. Examples include Stripe, Adyen, and PayPal.?

A Payment Gateway is a technology layer that enables merchants to accept online paymentsOnline Payments online-payments Transactions conducted over the internet using card details, digital wallets, or online banking. securely. It acts as the digital equivalent of a point-of-sale terminal, encrypting and routing the payment data from the customer to the processorProcessor processor A company authorized to process credit and debit card transactions between acquirers and issuers. and back.

🧰 Key Functions of a Payment Gateway

Function	Description
Data EncryptionEncryption encryption The process of encoding data to protect it from unauthorized access during transmission. Essential for payment security.	Secures customer card or wallet information.
Transaction Routing	Sends transaction data to the acquiring bank or PSP.
AuthorizationAuthorization authorization The real-time process of verifying that a payment method has sufficient funds or credit limit for a transaction. Results in an authorization code from the issuer.	Verifies if the transaction is approved or declinedDeclined declined A transaction that is not approved by the issuer. Reasons may include insufficient funds, suspected fraud, or incorrect card details..
FraudFraud fraud Criminal deception involving unauthorized payments or use of financial credentials. Detection Tools	Includes 3D Secure, tokenization, AVS checks, etc.
UI Integration	Provides APIs, SDKs, or hosted pages for checkout.
Multi-Payment Support	Accepts cards, walletsWallets wallets See Digital Wallets., bank transfers, and local payment methods.
Reporting	Offers dashboards and logs for payment reconciliation.

🔄 Where It Fits in the Payment Flow

textCopyEditCustomer → Merchant Checkout (via Payment Gateway) → PSP/Acquirer → Card Network → Issuer Bank → Response → Settlement

🔍 What Is a Payment Service Provider (PSP)?

A Payment Service Provider (like Stripe, Adyen, or Checkout.com) combines gateway + acquiring + settlementSettlement settlement The process of transferring funds from the issuer to the acquirer.under one roof. They allow businesses to accept payments without a direct acquiring bank relationship.

🏦 What Is an AcquirerAcquirer acquirer A financial institution or payment processor that manages the merchant account, enabling businesses to accept card payments. Acquirers receive all transactions from the merchant and route them to the appropriate issuing bank. (Acquiring Bank)?

An Acquirer is a licensed financial institution that processes credit and debit cardDebit Card debit-card A payment card that deducts money directly from a consumer’s checking account. May also support ATM withdrawals. payments on behalf of a merchantMerchant merchant An individual or business that accepts payments in exchange for goods or services.. It settles funds, handles chargebacks, and connects to card networks like VisaVisa visa A leading global payment technology company connecting consumers, businesses, and banks. and MastercardMasterCard mastercard A global payments network enabling electronic transactions between banks, merchants, and cardholders..

🆚 Comparison Table: Gateway vs PSP vs Acquirer

Feature / Role	Payment Gateway	Payment Service Provider (PSP)	Acquirer (Acquiring Bank)
Primary Role	Routes and encrypts payment data	End-to-end payment processing and settlement	Processes and settles card payments
Owns banking license?	❌ No	❌ Usually no (unless licensed, e.g., Adyen)	✅ Yes
Merchant onboarding	Refers to PSP or acquirer	Onboards merchants directly	Onboards via PSPs or directly (less common for SMEs)
Fraud tools	✅ Often integrated	✅ Integrated	❌ Usually minimal
Settles funds to merchant	❌ No	✅ Yes	✅ Yes
Examples	Authorize.net, eWay, Razorpay Gateway	Stripe, Adyen, Checkout.com, PayPal, Payoneer	NAB, JPMorgan Chase, Barclays, Citi, FIS

🌍 Leading Global Payment Gateways by Region

Payment Gateway	Region	Focus Countries	Website
Stripe	Global	US, UK, AU, SG, CA, JP	stripe.com
Adyen	Global	NL, EU, US, AU, SG	adyen.com
Checkout.com	Global (EMEA)	UK, UAE, SA, SG, HK	checkout.com
Razorpay	India	India	razorpay.com
Paystack	Africa	Nigeria, Kenya, Ghana	paystack.com
Airwallex	APAC/Global	Australia, HK, US, EU	airwallex.com
dLocal	Emerging Mkts	Brazil, Mexico, Indonesia, Nigeria	dlocal.com
Paytm Gateway	India	India	business.paytm.com
eWay	AU/NZ	Australia, New Zealand	eway.com.au
Mollie	Europe	Netherlands, Germany, France	mollie.com

📦 End-to-End Stack Example: Stripe vs Adyen vs Authorize.net

Provider	Gateway	Acquiring	Payouts	FX	Local Payment Methods	Merchant Wallet	Platform Support
Stripe	✅	✅ (via Stripe Capital)	✅	✅	✅	✅	✅
Adyen	✅	✅ (licensed acquirer)	✅	✅	✅	❌	✅
Authorize.net	✅	❌ (via partner acquirers like Chase)	❌	❌	❌	❌	✅

🌐 Country-Specific Leading PSPs/Gateways

Country	Leading PSP/Gateway	Notes
USA	Stripe, Braintree, Square	Wide adoption across SMEs and startups
Australia	Airwallex, eWay, Stripe	Strong FX focus and regulatory support
India	Razorpay, Paytm, Cashfree	Local methods and real-time UPI
UK	Checkout.com, Worldpay, Adyen	Strong EU/GBP support
Brazil	dLocal, PagSeguro, EBANX	Local cards and boleto integration
Nigeria	Paystack, Flutterwave	Strong for mobile and agent networks
China	Alipay, WeChat Pay, LianLian	Not gateways in classic sense, but dominant rails

💡 Emerging Trends in Gateways and PSPs

Modular architecture (pick-and-choose orchestration)
Crypto payment integration (stablecoins, BitcoinBitcoin bitcoin A decentralized digital currency, often accepted as an alternative payment method., Lightning)
Open banking payments (A2A via APIs)
Marketplace compliance (Split payouts, seller KYC)
No-code / low-code integration for SMBs

🧠 TL;DR Summary

You Are a…	You Need…
Startup selling online	A PSP like Stripe or Razorpay for full-stack simplicity
Large retailerRetailer retailer A merchant that sells goods or services directly to consumers. scaling globally	A PSP with acquiring capabilities like Adyen or Checkout.com
Enterprise with in-house payment team	Separate gateway + direct acquiring relationship
Marketplace platform	PSP with support for split payments (e.g., Stripe Connect, Adyen MarketPay)