Third-Party Processing

Third-party processing refers to the arrangement in which transactions are processed by service providers contracted by card issuers or acquirers, instead of directly by the merchants themselves. This model is particularly beneficial for small to medium-sized businesses that may not have the volume or resources to justify maintaining their own dedicated merchant accounts.

In third-party processing:

Third-party processing is distinct in that it allows businesses to bypass some of the complexities and costs associated with direct payment processing. However, merchants using this service typically face higher transaction fees and have less control over the payment process, which can include issues related to funds hold or delay in payouts. Despite these challenges, third-party processing remains a popular solution for many businesses looking for simplicity and ease in managing electronic payments.