--- title: Credit Card Processors vs. Merchant Service Providers description: Can you define what a credit card processor is? Learn what truly constitutes a processor and how they differ from Merchant Service Providers. image: https://blog.payjunction.com/hubfs/BLOG/FEATURED%20IMAGES/credit-card-processors.svg --- [tel:1-800-601-0230](tel:1-800-601-0230) 800-601-0230 - Features - Solutions - Developers - [Pricing](https://www.payjunction.com/payments/pricing.html) - Resources [See a Demo](https://www2.payjunction.com/tour-payjunction) Features - EXPLORE PRODUCTS [No-code Payments Integration®](https://www.payjunction.com/payments/no-code-payments-integration.html) [ZeroTouch Terminal](https://www.payjunction.com/payments/smart-terminal.html) [Portable Terminal](https://www.payjunction.com/payments/portable-credit-card-reader-terminal.html) - ACCEPT PAYMENTS [Invoices](https://www.payjunction.com/payments/electronic-invoices.html) [ACH Electronic Checks](https://www.payjunction.com/payments/ach-payments.html) [SmartSurcharge®](https://www.payjunction.com/payments/smart-surcharge.html) [Cards on File](https://www.payjunction.com/payments/store-credit-card-info.html) [Rapid Refunds](https://www.payjunction.com/payments/credit-card-refund.html) [Recurring Billing](https://www.payjunction.com/payments/recurring-payments.html) [Ecommerce](https://www.payjunction.com/payments/ecommerce-merchant-services.html) [Mobile App](https://itunes.apple.com/us/app/payjunction/id1324839420?ls=1&mt=8) - EXPLORE CAPABILITIES [Overview](https://www.payjunction.com/payments/payment-processing-solutions.html) [Integration Marketplace](https://integrations.payjunction.com/) [Remote Signature](https://www.payjunction.com/payments/signature-capture.html) [Multi-Location](https://www.payjunction.com/payments/enterprise-payments.html) [Sales Reports](https://www.payjunction.com/payments/sales-reports.html) [Search and Export](https://www.payjunction.com/payments/transaction-history-search.html) [Customization](https://www.payjunction.com/payments/custom-payment-software.html) Solutions - [Veterinary Streamline payment workflows and get paid faster with up-front deposits and payment schedules for high-cost procedures. 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However, it’s important that business owners understand the difference between credit card processors and Merchant Service Providers as each provider handles different parts of your [credit card processing](https://blog.payjunction.com/credit-card-processing-diagram). Let’s jump in. ## Credit Card Processors The term credit card processors is often used as a blanket term for all [credit card processing middlemen](https://blog.payjunction.com/credit-card-processing-middlemen/), but it actually refers to Payment Processors. A Payment Processor works behind the scenes as the technical glue to maintain communication between Merchant Service Providers and the banks. Although processors do their part to facilitate the processing of your credit card transactions, they do not have a direct relationship with your business. Credit card processors are chosen by the bank your Merchant Service Provider partners with. ## Payment Processing Demo Schedule 15 minutes with a payments expert Get a customized PayJunction product walk-through Understand requirements and pricing Determine your SAVINGS! GET DEMO NOW ## Merchant Service Providers Just like it sounds, Merchant Service Providers supply the merchant services a business needs to tangibly run a credit card transaction. In the payments industry, providers are also referred to as Independent Sales Organizations because they manage the sales and marketing of products and services for credit card processing. These items includes [merchant accounts](https://blog.payjunction.com/merchant-account/) and [credit card readers](https://blog.payjunction.com/credit-card-readers/). Unlike processors, a Merchant Service Provider works directly with businesses. From demoing and onboarding to processing and troubleshooting, your provider should be there for you every step of the way. A large part of its involvement can be chalked up to the level of [customer service](https://blog.payjunction.com/payjunction-reviews-love-letters/) it provides. ## Roles in Credit Card Authorization The processor plays a part in three of the [six steps it takes to authorize](https://blog.payjunction.com/understanding-credit-card-authorization/) a credit card transaction, while the provider participates in two. After the Merchant Service Provider receives the payment information, it’s passed to the credit card processor and then onto the network. Seconds later, after the banks have confirmed that the credit or funds are available, the processor relays this information back to the provider. While the processor is responsible for communicating transaction information between the provider and the network, the provider is responsible for the initial input and output of the transaction information from the cardholder’s perspective. If the provider is unable to read the payment information, the transaction cannot be passed on to the processor. Similarly, if the provider cannot read the code from the banks communicated by the processor, the cardholder will not know if their payment was successful or not. You can get a visual of the general flow in this [diagram](https://blog.payjunction.com/credit-card-processing-diagram). While these two providers play very different roles in this process, they are both vital to successful credit card processing at your business. ## Looking for a Merchant Service Provider? [![SEELCT THE BEST FIT FOR YOUR BUSINESS SIZE](https://no-cache.hubspot.com/cta/default/635739/ac4fcf92-fe7a-4626-9b50-d71927c1441b.png)](https://cta-redirect.hubspot.com/cta/redirect/635739/ac4fcf92-fe7a-4626-9b50-d71927c1441b) Do you use other payment industry terms interchangeably? Tell us below and we will let you know if they are truly the same. *Editor's Note: This post was originally published in December 2018 and has been updated for comprehensiveness and accuracy.* [Credit Card Processing](https://blog.payjunction.com/topic/credit-card-processing) --- ##### [![Why We Care About Being an Ethical Credit Card Processing Company](https://blog.payjunction.com/hubfs/BLOG/FEATURED%20IMAGES/ethical-credit-card-processing-why.svg) Why We Care About Being an Ethical Credit Card Processing Company](https://blog.payjunction.com/ethical-credit-card-processing-why) ##### [![The Biggest Credit Card Processing Pitfalls](https://blog.payjunction.com/hubfs/BLOG/FEATURED%20IMAGES/credit-card-processing-pitfalls.svg) The Biggest Credit Card Processing Pitfalls](https://blog.payjunction.com/credit-card-processing-pitfalls) ###### About Author ![Picture of Ursula Librizzi](https://blog.payjunction.com/hs-fs/hubfs/Ursula_Librizzi.jpg?width=200&height=200&name=Ursula_Librizzi.jpg) ### Ursula Librizzi Ursula is the sales and marketing operations manager for PayJunction. She oversees daily marketing tasks and liaises between the sales and marketing departments. ###### Related Posts ## [![What Are Payment Processors?](https://blog.payjunction.com/hubfs/BLOG/FEATURED%20IMAGES/payment-processors.svg) What Are Payment Processors? Payment Processors are the technical glue in the transmission of credit card transactions. They maintain the computer network between Merchant Account Providers and the banks, and facilitate communication between these providers.](https://blog.payjunction.com/payment-processors) ## [![Selecting the Best Credit Card Processor for Ecommerce](https://blog.payjunction.com/hubfs/BLOG/FEATURED%20IMAGES/best-credit-card-processor-ecommerce.svg) Selecting the Best Credit Card Processor for Ecommerce If you’re a business owner that has yet to start selling goods or services online, you’ve probably heard all of the arguments in favor of ecommerce: that the internet is the world’s fastest-growing retail channel, that people of all ages are increasingly shopping online, and that people who shop online typically spend more – as much as 25% more – than in-store shoppers.](https://blog.payjunction.com/best-credit-card-processor-ecommerce) ## [![How to Compare Merchant Processing Services](https://blog.payjunction.com/hubfs/BLOG/FEATURED%20IMAGES/merchant-processing-services.svg) How to Compare Merchant Processing Services Are you researching merchant processing services? Before you start considering providers, you first need to understand how to compare what is available to you. Merchant processing services differ across providers, and there are certain characteristics and features you should pay attention to when evaluating your options.](https://blog.payjunction.com/merchant-processing-services) ## Meet a Payment System You’ll Love - ###### FEATURES [No-code Payments Integration®](https://www.payjunction.com/payments/no-code-payments-integration.html) [ZeroTouch Terminal](https://www.payjunction.com/payments/smart-terminal.html) [Portable Terminal](https://www.payjunction.com/payments/portable-credit-card-reader-terminal.html) [Invoices](https://www.payjunction.com/payments/electronic-invoices.html) [ACH](https://www.payjunction.com/payments/ach-payments.html) [SmartSurcharge®](https://www.payjunction.com/payments/smart-surcharge.html) [Cards on File](https://www.payjunction.com/payments/store-credit-card-info.html) [Recurring Billing](https://www.payjunction.com/payments/recurring-payments.html) - [Ecommerce](https://www.payjunction.com/payments/ecommerce-merchant-services.html) [Customization](https://www.payjunction.com/payments/custom-payment-software.html) [Remote Signatures](https://www.payjunction.com/payments/signature-capture.html) [Rapid Refunds](https://www.payjunction.com/payments/credit-card-refund.html) [Multi-Location](https://www.payjunction.com/payments/enterprise-payments.html) [Sales Reports](https://www.payjunction.com/payments/sales-reports.html) [Search and Export](https://www.payjunction.com/payments/transaction-history-search.html) [Mobile App](https://itunes.apple.com/us/app/payjunction/id1324839420?ls=1&mt=8) - ###### BUSINESS SOLUTIONS [Auto Dealers](https://www2.payjunction.com/automotive-merchant-services) [Veterinary](https://www2.payjunction.com/payment-processing-veterinarians) [Dentistry](https://www2.payjunction.com/payment-processing-dentists) - ###### RESOURCES [Product Overview](https://www.payjunction.com/payments/payment-processing-solutions.html) [Integrations](https://integrations.payjunction.com/) [Blog](https://blog.payjunction.com/) [Guides](https://guides.payjunction.com/) [Support](https://support.payjunction.com/) [Service Status](https://status.payjunction.com/) [Tutorials](https://blog.payjunction.com/tag/pj-university/) [API](https://www.payjunction.com/payments/payment-api.html) - [Trust Center](https://trust.payjunction.com/) [Request a Demo](https://www2.payjunction.com/payjunction-demo) [Pricing](https://www.payjunction.com/payments/pricing.html) [About Us](https://www.payjunction.com/payments/about.html) [Careers *HIRING*](https://www2.payjunction.com/careers) [Press](https://media.payjunction.com/) - ###### RESOURCES [Integrations](https://integrations.payjunction.com/) [Guides](https://guides.payjunction.com/) [Tutorials](https://blog.payjunction.com/tag/pj-university/) [API](https://www.payjunction.com/payments/payment-api.html) [Request a Demo](https://www2.payjunction.com/payjunction-demo) [About Us](https://www.payjunction.com/payments/about.html) [Careers *HIRING*](https://www2.payjunction.com/careers) [Press](https://media.payjunction.com/) [Trust Center](https://trust.payjunction.com/) [Service Status](https://status.payjunction.com/) - ###### BUSINESS SOLUTIONS [Auto Dealers](https://www2.payjunction.com/automotive-merchant-services) [Veterinary](https://www2.payjunction.com/payment-processing-veterinarians) [Dentistry](https://www2.payjunction.com/payment-processing-dentists) ##### 800-601-0230 SIGN UP FOR OUR NEWSLETTER  Become a better advocate for your business. 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