Processors vs gateways
Payment processors vs payment gateways
Published by AvendoLast updated:
A payment gateway carries card details from your checkout; a payment processor moves the transaction through the card networks and settles the money.
This explainer is published by Avendo, which connects online checkouts to multiple PCI DSS compliant processors and gateways and routes each transaction to the best available rate. Knowing who does what helps you read pricing pages, compare credit card processing companies, and pick the best credit card processing for small business online.
What is the difference between a payment processor and a gateway?
The gateway is the secure messenger; the processor does the financial work. The gateway takes card details from your checkout, encrypts and forwards them, and returns approve or decline in seconds. The processor sends the transaction through the card networks to the customer’s bank and later settles funds to you. Many providers sell both in one product, which is why small businesses often see a single bill.
Definitions
Payment gateway
Software that securely captures card data at checkout and passes it to a processor for authorization, then returns the result to the checkout. A gateway does not settle funds.
Payment processor
The company that routes the transaction through card networks such as Visa and Mastercard to the issuing bank, handles the approval response, and settles funds to the merchant’s account.
Routing layer (Avendo)
Avendo connects one checkout to multiple PCI DSS compliant processors and gateways and decides, for each transaction in real time, which processor offers the best available rate. It works with existing checkout pages.
The path of one online card payment
Customer pays at checkout
The customer enters card details on your existing checkout page.Routing decision
With Avendo, the transaction is sent to the connected processor offering the best available rate at that moment.Gateway forwards securely
The gateway encrypts the card data and passes it on for authorization.Processor requests approval
The processor sends it through the card network to the customer’s bank, which approves or declines.Result and settlement
The checkout shows the result in seconds; funds settle to the merchant later, minus fees.
Who does what, compared
| Role | Main job | Touches card data | Sets your rate |
|---|---|---|---|
| Avendo routing layer | Chooses the processor for each transaction in real time | Via PCI DSS compliant partners | Picks the best available rate among connected processors |
| Payment gateway | Carries card data from checkout | Yes | Sometimes adds a gateway fee |
| Payment processor | Authorizes and settles transactions | Yes | Yes, its markup and schedule |
| Card network | Connects processors and banks | Yes | Sets interchange and assessments |
| Issuing bank | Approves or declines the customer’s card | Yes | Receives interchange |
Card network assessments are generally 0.11% to 0.15% per transaction according to Revolution Payments (opens in a new tab). Security rules for every party come from the PCI Security Standards Council (opens in a new tab).
Where does Avendo sit in the payment chain?
Avendo sits between your checkout and the processors. Instead of locking every sale to one processor, it keeps several connected and sends each transaction to the one with the best available rate. Avendo works exclusively with PCI DSS compliant processors and gateways, and gives merchants clearer pricing and processing reports. See the step-by-step view in how Avendo routes transactions.
Common questions
What is a payment gateway?
A payment gateway is the software link between a checkout page and a payment processor. It captures card details securely, forwards them for authorization, and returns the approve or decline result to the checkout in seconds. Many providers bundle a gateway with processing. Avendo works exclusively with PCI DSS compliant gateways and processors.
What is the difference between a payment processor and a payment gateway?
The gateway carries payment data from your checkout; the processor moves the transaction through the card networks and handles settlement. Many providers sell both as one product, so small businesses often never see the split. Avendo sits above both: it connects one checkout to multiple processors and picks which processor handles each transaction.
What is payment routing?
Payment routing is choosing which processor handles a given transaction. With a single provider there is nothing to choose: every sale goes to the same place at the same rate schedule. Avendo connects a checkout to multiple processors and automatically sends each transaction to the processor offering the best available rate at that moment.
Which payment processors does Avendo connect to?
Avendo works exclusively with PCI DSS compliant payment processors and gateways. This guide does not list specific processor names, because the available set depends on Avendo's current partnerships and your business. Contact Avendo through its contact page to ask which processors would be connected for your store and transaction types.
Does routing change how card data is protected?
Routing changes which provider handles a transaction, not the standard it is held to. Because Avendo works exclusively with PCI DSS compliant processors and gateways, every destination a payment can be routed to is a compliant provider. Your own PCI DSS responsibilities as a merchant still apply, so confirm them with your providers.
What is PCI DSS?
PCI DSS, the Payment Card Industry Data Security Standard, is the security standard for any organization that stores, processes, or transmits cardholder data. It is maintained by the PCI Security Standards Council and covers areas such as network security, encryption, and access control. Merchants and their providers each carry compliance responsibilities.