What is a payment processor and how is it different from a payment gateway?

A payment processor is the company that does the heavy lifting on a transaction: it talks to the customer's bank, gets authorization, settles the funds, manages chargebacks, and deposits the net into the merchant account. Stripe, Square, PayPal, and Adyen are payment processors. Visa and Mastercard are not — they are card networks the processor talks to on the merchant's behalf.

The distinction between processor and gateway gets confused because some products do both. A payment gateway is the front-end piece that takes the card details from a customer and securely passes them to a processor. A processor handles the back-end. Stripe sells both, packaged together. Standalone gateways like Authorize.net hand off to processors like First Data. For most small businesses on Stripe or Square, the distinction does not matter operationally — the processor and gateway are bundled.

Pricing across processors is broadly similar: 2.9% plus 30 cents per transaction is the standard card rate for non-enterprise customers, with various discounts for ACH (often around 0.8%), invoicing-specific rates, and volume tiers. The processor relationship matters more for fund-flow control. For Syntharra, Stripe Connect routes funds directly from debtor to client bank without ever touching Syntharra's account — a structural choice that avoids any custodial risk.