An authorization of a transaction is the process where the issuing bank approves a transaction. This is the first step in running a transaction, once an authorization has been processed the funds are held until settlement of the transaction.

A payment gateway is an Application Service Provider service which allows you to accept payments via a website or through MOTO (Mail Order/Telephone Order). Companies who usually use this service are online retailers and all other e-businesses. A payment gateway will receive the credit card information, encrypt it and securely transmit it from the customer to the merchant.

The payment processor is the company that will process your credit card transactions. Each payment processor has a relationship with an issuing bank which will act as the recipient for the transactions that are processed. They will then clear the transactions and deposit the funds to the merchant.

A credit card is a payment card issued to users as a system of payment. It allows the cardholder to pay for goods and services based on the holder’s promise to pay for them. The issuer of the card creates a revolving account and grants a line of credit to the consumer (or the user) from which the user can borrow money for payment to a merchant or as a cash advance to the user.