Payment gateway vs PSP vs acquirer: who does what

A payment gateway is the software that collects payment details at checkout and routes them securely; an acquirer is the licensed bank or payment institution that contracts with the merchant, accepts its card transactions and pays out the funds. "PSP" (payment service provider) is the wider legal term for any authorised provider of payment services, and in everyday use it usually means a company that sells gateway, processing and often acquiring as a single package.

The confusion comes from the fact that one company can play all three roles at once. The table below separates them by function, by whether the firm touches the money, and by the legal basis that applies in the EU and UK.

The roles side by side

Sources: Directive (EU) 2015/2366 (PSD2) and Regulation (EU) 2015/751, both checked 3 November 2026.

What a payment gateway does

A gateway sits between the checkout page (or a card terminal) and the rest of the payment chain. It takes the card number or bank details the shopper enters, protects them, formats the request and sends it on to a processor or acquirer. It then passes the answer (approved or declined) back to the merchant's site.

In legal terms, a pure gateway is a technical service. PSD2 and the UK Payment Services Regulations 2017 exclude providers of technical services that support payments without ever taking possession of the funds. The FCA's approach document (December 2018 edition) lists technical service providers among the exclusions in Schedule 1, Part 2 of the UK regulations, and notes that "mere technical service providers" who never hold the money fall outside card issuing as a payment service. The FCA points readers to its Perimeter Guidance (PERG 15) for the detail.

That is why a gateway on its own does not move money into the merchant's bank account. Someone else, the acquirer, has to do that.

What an acquirer does

The acquirer is the regulated party in the merchant relationship. PSD2 defines acquiring as a service in which a provider contracts with a payee to accept and process payment transactions, with the result that funds reach the payee (Article 4(44)). The Interchange Fee Regulation uses almost the same wording for "acquirer" in Article 2(1).

Acquiring is a licensed activity. Annex I of PSD2 lists "issuing of payment instruments and/or acquiring of payment transactions" as payment service number 5. The FCA's approach document names merchant acquiring firms among the businesses expected to need authorisation or registration. In practice, acquirers are banks, payment institutions or e-money institutions.

The acquirer also carries obligations that a gateway does not:

• it connects the merchant to card schemes such as Visa and Mastercard (see our profiles of Visa and Mastercard);
• it pays the interchange fee to the card issuer on each transaction (interchange is defined in Article 2(10) of Regulation 2015/751);
• it handles disputes and chargebacks on the merchant's side;
• it settles the net amount to the merchant's account.

For the full step-by-step flow, see how card payments work.

What "PSP" means

In law, PSP is a broad term. PSD2 Article 4(11) defines a payment service provider by reference to the bodies listed in Article 1(1) (credit institutions, e-money institutions, payment institutions and others) and to persons exempted under Articles 32 or 33. A bank that issues debit cards is a PSP. So is an account information provider registered with the FCA.

In the trade, "PSP" usually means something narrower: a company that sells merchants one contract covering the gateway, processing, fraud tools, a range of payment methods and, often, acquiring. Some of these firms hold acquiring licences themselves; others plug a third-party acquiring bank into their platform. The merchant may not see the difference at checkout, but it matters for who holds the funds, who sets the risk rules and who the merchant has a contract with.

Our company profiles of Adyen, Stripe, Checkout.com and Worldpay list the licensed entities each group uses, taken from regulator registers.

Three common set-ups

None of these is better in the abstract. The trade-off is usually between simplicity (one contract) and control (choosing and switching acquirers, negotiating rates directly). Our Adyen vs Stripe comparison and the Stripe alternatives page show how different providers package these layers.

How fees split between the roles

On a card payment the merchant usually pays one blended or itemised charge, but the money is shared out along the chain:

In the EU, Regulation (EU) 2015/751 of 29 April 2015 caps interchange on consumer debit cards at 0.2% of the transaction value (Article 3) and on consumer credit cards at 0.3% (Article 4). Article 1(3) takes commercial cards, ATM cash withdrawals and cards issued by three-party schemes outside those caps. Article 5 stops schemes and issuers getting round the caps through other payments with the same effect, such as "net compensation".

In the UK, the Payment Systems Regulator ran a market review of card-acquiring services. It published its final report in November 2021 and its final decision on remedies (PS22/2) on 6 October 2022. The remedies include summary boxes, online quotation tools and trigger messages intended to help businesses compare acquirers. The PSR page on the review was last updated in May 2024.

Where open banking and APMs fit

Not every payment uses an acquirer. In an open banking payment, a payment initiation service provider asks the shopper's bank to send a transfer straight to the merchant. PSD2 Annex I lists payment initiation as a separate payment service (number 7). The FCA says firms offering it must be authorised and hold at least EUR 50,000 in initial capital (FCA page last updated 17 September 2024). There is no card scheme and no interchange in that flow. See open banking payments explained.

Wallets, buy now pay later and local schemes such as iDEAL or BLIK each have their own operator and rulebook. A PSP often aggregates them behind one integration. See alternative payment methods explained.

What to check before signing

• Which legal entity you contract with. Look for the name and registration number on the contract, then find that entity on the regulator's register. Our guide on how to check a financial licence walks through it.
• Who acquires. Ask whether the provider is the acquirer of record or uses a partner bank, and in which country.
• Who holds the funds and when. Settlement timing, rolling reserves and the currency of payout all depend on the acquirer.
• Fee structure. Ask whether pricing is blended or "interchange plus", and whether scheme fees are passed through separately.
• Payment method coverage. Check which local methods are supported in each market you sell into.
• Regulatory changes. The EU is replacing PSD2 with a new package; see PSD3 and the PSR.

More coverage in the gateways and acquiring hubs.

Key terms

• Acquirer: the licensed provider that contracts with a merchant to accept and process its payments and transfer the funds to it.
• Issuer: the provider that gives the payer a card or other payment instrument.
• Payment gateway: the technical service that captures and routes payment data; it does not hold funds in a pure gateway set-up.
• Processing entity: any person providing payment transaction processing services (Regulation 2015/751, Art. 2(28)).
• Interchange fee: the per-transaction fee passed between acquirer and issuer.
• PSP: in law, any provider of payment services under PSD2; in trade use, a provider bundling gateway, processing and acquiring.
• Technical service provider: a firm supporting payments without coming into possession of the funds, excluded from the payment services regime.