A payment processor is a third-party company that manages commercial transactions by securely transmitting payment data between the customer, merchant, acquiring bank, and issuing bank. Payment processors act like virtual cash registers: They enable a store to accept credit or debit card payments for the goods and/or services that it sells. Payment processors quickly relay a customer’s credit or debit card information in real-time to the banks of both the customer and the merchant. If the payment information provided is valid, the charge goes through. Security measures such as encryption or tokenization are crucial in payment processing to ensure that fraudulent transactions do not go through.