Understanding payment gateway vs payment processors


Pls am trying to grasp the difference between payment processor and gateway, i want to develop a payment gateway.
I was told I need to use a payment processor for it, I learnt that paystack was built on flutterwave which the later is a payment processor. Is dis true?
And how do I go about developing my payment gateway built on flutterwave?
Pls your reply wud be so much appreciated. Tanks in advance.



Hello @DoubleAsam,

A payment gateway is used for facilitating online transactions and helping them get approved. It is also the first place the transaction goes when a customer submits an order online.

Payment processors are the financial institutions that work in the background to provide the core payment processing services used by an online merchant. These core processing services include authorization and refunding of transaction requests. Payment processors usually have partnerships with other companies, such as payment gateways, who deal directly with merchants to handle all processing needs.

You can leverage Rave to become a Mini Payment Gateway through its subdomain feature.


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This reply doesn’t answer my question, saw the same thing on quora as well.
Frombmy little research I found out that
Flutterwave is a payment processor while paystack is a payment gateway similar to voguepay which is also a payment gateway. I stand to be corrected.



Hi, great question.
A payment gateway is a piece of software that serves as a mediator between a merchant and an acquiring bank.

A payment processor is a corporation that provides a payment gateway and a full pack of payment processing services.

If you need a more comprehensive explanation - let me know.



A payment gateway is a technical solution that allows online business owners to accept payment on a website using a bank card and provides verification of customer data in the shortest possible time. This gateway is the link between your website and the acquiring partner. A payment gateway is required for all types of payments over the Internet.

To ensure the secure transmission of payment information between the buyer, the Internet seller and the acquirer, the payment gateway protects the card data by encrypting the buyer’s confidential data, such as the card number.

  • A customer enters the payment details/billing information through a web interface.
  • Information about the details of the transaction is transmitted to the payment gateway which he sends to the acquiring bank.
  • The acquiring bank sends an information (authorization) request to the payment system (Mastercard, VISA, others).
  • In the case of receiving a request for authorization, the issuing bank returns an authorization code that allows the payment system to make a transaction.
  • This code is returned to the payment gateway, and from there - a report to the seller with the result of authorization.
  • With a positive authorization, the transaction is considered to be completed, the merchant can provide the service or ship the goods. The funds will be debited from the player’s card and refunded to the merchant’s account.

The importance of a financial intermediary in the process of this exchange cannot be underestimated. The buyer, the seller, the issuing bank and the acquiring bank, and even the aggregator of payments, if it participates in the process, all of them trust the selected processing

Payment processor - is a company that has this software and which providing money processing services.

For a deeper understanding, you can read the following article.



The first reply answered your question quite alright. Here is a list of various payment gateways you could go through.
Payment Processors are simply banks. Or maybe you should rephrase the question.