# Processor - Issuer and Acquirer Roles in Payments

Source: https://payneteasy.com/glossary/what-is-a-processor

_Learn what a processor does in card payments, how issuer processors differ from acquirer processors, and how the role compares to acquirers and gateways._

Processor is a service provider that handles payment authorization, clearing, and settlement. In card payments the term covers two distinct roles - acquirer processors working for merchants and issuer processors working for card-issuing banks.

## What Is a Processor?

A processor operates the technical infrastructure that moves transaction data between merchants, card networks, and banks. It routes authorization requests, submits clearing files, and [orchestrates settlement](https://payneteasy.com/solutions/orchestration-payment-platform) - the plumbing that makes a card payment work end to end.

## Issuer Processors vs Acquirer Processors

An acquirer processor works on the merchant side: it receives transactions from gateways and terminals and passes them to the card networks on behalf of the acquiring bank. An issuer processor works on the bank side: it maintains card records and responds to authorization requests on behalf of the issuer.

Some large companies perform both roles, and many financial institutions [outsource processing to specialists](https://payneteasy.com/solutions/payment-integration) rather than run the infrastructure themselves.

## Processor vs Acquirer vs Gateway

**The acquirer** is the licensed financial institution that holds the merchant relationship and the funds; **the processor** is the technology operator executing transactions; **the gateway** is the merchant-facing layer that [collects payment data and passes it onward](https://payneteasy.com/solutions/gateway).

## Frequently Asked Questions

### Is a processor the same as an acquirer?

No - the acquirer is the licensed bank; the processor runs the technology that executes transactions.

### What is the difference between issuer and acquirer processors?

Issuer processors act for card-issuing banks; acquirer processors act for merchants’ acquiring banks.

### Do merchants choose their processor?

Often indirectly - the choice of gateway or acquirer usually determines the processing stack.

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