What is payments processing?

Payments processing refers to the series of actions that occur when a customer makes a payment for goods or services, typically using credit cards, debit cards, or digital wallets. This process involves securely transmitting payment information, authorizing the transaction with the financial institution, and transferring funds from the buyer’s account to the seller’s account. Payments processing ensures transactions are completed quickly, accurately, and safely, and is a critical part of ecommerce and point-of-sale systems. Companies often use payment processors or gateways to handle these transactions efficiently and comply with security standards.