A third-party payment processor is a business that provides the infrastructure, hardware, and support that enables merchants to accept a wide variety of consumer payments at their point of sale.
Today’s customers expect a wide variety of payment options — including debit cards, credit cards, digital wallets, and more — when purchasing products from retailers. Third-party payment processors enable retailers and merchants to provide this kind of customer-loyalty-boosting variety.
Third-party payment processors provide retailers with the resources needed to process payments, such as point-of-sale (POS) systems, card readers, mobile readers, ecommerce presences, and security protocols for card and online payments.
Retailers that use third-party payment processors, such as Square, Stripe, or PayPal, don’t have to manually set up and manage their own accounts with a financial institution. The third-party payment processor takes that on for the merchant, saving them significant time, money, and effort.
A third-party payment processor is particularly helpful for businesses with lower purchase volumes or small ecommerce businesses. These relationships help ease the burden of growing the brand and can provide a consistent customer experience that builds loyalty.