A cardholder is the person to whom a payment card (debit, credit, or prepaid) is issued. The cardholder uses the card to make payments or withdraw funds from their bank account.

A merchant account is a type of business bank account that allows a merchant to receive payments from cardholders. It is issued by an merchant acquirer (acquiring bank) and comes with a merchant identification number (MID) used to track transactions.

A merchant acquirer, or acquiring bank, is the bank that “acquires” card payments from issuing banks for depositing in a merchant account. It communicates with the issuing bank through payment networks (payment schemes) and ensures the transaction is completed, then transfers the funds to the merchant.

A merchant ID (MID) is the unique number associated with a merchant account.

A merchant is any individual or business that sells products or services and accepts electronic payments, such as credit cards, debit cards, digital wallets, or crypto payments.

A payment facilitator (PayFac) is a payment service provider (PSP) that gathers multiple merchants (called sub-merchants) under one merchant ID (MID) and sometimes also acts as a payment processor (acquirer processor).

A payment gateway is the front‑end technology that captures and securely transmits customer payment details (like card data or digital wallet info) from the checkout page to the payment processor (acquirer processor) or merchant acquirer (acquiring bank). It may also perform fraud checks, such as 3D Secure authentication.

For more information, you can read our article ‘Payment Gateway vs Payment Processor: What’s the Difference?‘.

A payment scheme, also known as a payment network, is the infrastructure that connects cardholders, issuing banks, merchant acquirers (acquiring banks), and merchants. Examples include Visa, Mastercard, UnionPay, and American Express. These networks govern the rules and handle the actual transfer of payment data between parties.

A payment service provider (PSP) is a company that offers a complete package of services for merchants to accept payments. This may include a payment gateway, processing, fraud protection, reporting tools, and sometimes even acquiring services.

At bilixe, we use the term payment service provider (PSP) broadly to describe any actor involved in enabling payments, including payment gateways, payment processors (acquirer processors), merchant acquirers (acquiring banks), and PayFacs.

An acquirer processor, also known as a payment processor or frontend processor, is the technology provider that supports the merchant acquirer (acquiring bank). It securely routes card transactions, communicates with the payment networks (payment schemes) (like Visa or Mastercard), and ensures the payment is approved or declined.

An acquirer is an merchant acquirer (acquiring bank) or an payment processor (acquirer processor) or both that enables merchants to accept payments.

An Independent Sales Organization (ISO) is a third-party company authorized to sell payment processing services on behalf of payment service providers (PSPs). ISOs often help merchants set up payment solutions by partnering with payment gateways, payment processors (acquirer processors), and merchant acquirers (acquiring banks).

An issuer processor, also known as a payment processor or backend processor, is the technology provider that supports the issuing bank in the processing transactions. It ensures the cardholder has sufficient funds and approves or declines transactions.

An issuer is any bank or licensed financial institution that issues payment cards to cardholders. Non-banks can also become issuers through partnerships with licensed card sponsors, known as BIN sponsors.

An issuing bank is the bank that provides a payment card (credit or debit) to a cardholder. It verifies the cardholder’s identity, approves or declines transactions, and sends funds to the merchant acquirer (acquiring bank) when a purchase is made.