The short answer
A payment processor is the company that executes the technical work of moving a card transaction through the card network, getting it authorized, and settling the funds into your merchant account. Stripe, Square, First Data/Fiserv, TSYS, Elavon, and Worldpay are the big processors in the US.
In plain English
The processor is where the rubber meets the road. When a customer's card swipes, your gateway sends the data to the processor. The processor talks to the card network (Visa/Mastercard), which talks to the issuing bank, which returns an auth code. The processor captures the transaction and, hours later, settles the funds into your acquirer's merchant account.
Modern bundled providers (Stripe, Square) are processor + gateway + acquirer + software in one company. Traditional setups separate them: you might have Authorize.net as gateway, Fiserv as processor, and Wells Fargo as acquirer — three companies, three contracts.
How it shows up in your business
- Your processor is the one that can freeze your account, put you on reserve, or close your merchant account for cause.
- Processor fees are the variable portion of your statement — usually 0.05% to 0.30% margin on top of interchange + network assessments.
- Your processor's restricted-business list determines which verticals get approved. Stripe's list ≠ Square's list ≠ Authorize.net-partnered-acquirer's list.
- Processor chooses determine availability of things like instant payouts, card-present readers, POS integrations.
Numbers to know
Big US processors by market share (approximate): Fiserv (First Data), Worldpay/FIS, Global Payments, Elavon, TSYS, Square, Stripe, PayPal/Braintree, Adyen. Combined they handle the vast majority of US card volume.
Why multi-brand operators care
Your processor is the single biggest determinant of whether you can accept cards and at what rate. multiflow sits on top of your processor — whichever one you're approved on — and orchestrates multi-brand routing. We don't replace the processor. Switching multiflow providers doesn't require switching processors, and vice versa.