"Know Your Payments: The Major Players in the Payment Ecosystem"
Sravanthi Pulijala
April 13, 2023

Welcome to our blog on "Know Your Payments: The Major Players in the Payment Ecosystem".

In today's digital age, payment processing has become an integral part of our daily lives. From buying groceries online to paying bills, we rely on payment systems to carry out our transactions quickly and securely. However, behind the scenes, there are several key players involved in the payment ecosystem that ensure our transactions are processed smoothly.

In this blog, we will take a closer look at the major players in the payment ecosystem and understand their roles in the payment processing cycle. We will explore the roles of issuers, acquirers, payment processors, card networks, and more.

So let's dive in and gain a deeper understanding of the payment ecosystem.

Payment systems have become increasingly digital and mobile, allowing consumers to make purchases and transfer funds quickly and easily. Thanks to the fintech companies for revolutionizing payments and driving innovation to new digital payment systems. There is complex and intricate set of processes that need to work together in a payment process.

Payment Processing Cycle:

Who’s Involved?

1. Cardholder

The person who owns a credit card/debit card which is issued by the bank.

2. Merchant

Business owner or service provider to whose account the funds are transmitted. A merchant needs to create a “Merchant Account” for receiving payments from shoppers, which is Issued by an acquiring bank.

3. Acquiring bank

The Merchant's Bank that holds the merchant's account, accepting the deposits from the merchant's transactions.

4. Issuing bank

This is a Cardholder’s bank or financial institution that offers credit and issues cards to customers.

5. Payment Gateways

It is a transaction processing technology that captures, stores and transmits card information from the customer to the acquirer.

6. Payment Processors

The processor is responsible for the actual transfer of data and funds between the entities. It processes credit and debit card payments based on the requests it receives through the gateway.

Some acquiring banks also provide payment processors and are referred to as acquirers.

7. Card Networks

The card networks (Mastercard, Visa, Discover, American Express, etc.) connects the issuing bank and acquiring bank to facilitate an online payment also provides the infrastructure needed to clear and settle transactions between issuing and acquiring banks.

All the entities that handles card data follows PCI DSS compliance(Payment card industry data security standard) to ensure that their systems and processes are secure.

Payments Flow:

Payment processing services include authorization, clearing and settling of a transaction. A card holder buys goods or services from the merchant and enters the card details, Payment gateway is a technology that captures and encrypts the card data and sends the details to the Acquiring bank.

Acquiring bank sends card transaction information to the card networks through a payment processor. Payment Processor routes the data to the related card networks. The card networks (Mastercard, Visa, Discover, American Express, etc.) monitors the transaction, checks for fraud, compliance policies.


Card Networks sends transaction information to the cardholder's issuing bank and requests for payment authorization. The issuing bank authenticates card information and if funds are available, sends an approval code or a decline message back to the card network.


To facilitate the exchange of money between the merchants and their customers, the card networks conduct interbank “clearing” and “settlement” of each card transaction. Acquiring bank sends all the authorized transactions to the appropriate card network (VISA, MasterCard, etc.) in a batch by the end of the day. The card networks send each authorized transaction to the appropriate issuing bank.


The issuing bank debits or withdraws funds for each authorized transaction from the cardholder's account and sends the funds to the card networks. The card network then sends the funds to the acquiring bank.

The major players in the payment ecosystem:

  • Card networks: Mastercard, American Express, Visa, UnionPay, Discover.
  • Card issuers: American Express, Bank of America, HSBC, City bank, chase.
  • Acquirers: Adyen, Bank of America Merrill Lynch Merchant Services, Barclays, JPMorgan Merchant Services, Nexi Payments, Sberbank, and Worldline.
  • Processors: Elavon, FIS Worldpay, Fiserv, Klarna, Square, and Stripe.
  • Payment gateways: Authorize.NET, Braintree, Shopify, Square, Stripe.
  • Facilitators/Payment Service Providers: PayPal, Fiserv, Due, Square, and Stripe.

New Entity in the Payments Ecosystem:

Payment Service Providers:

I am sure you must have heard about Razor Pay, Stripe, PayPal, Square. All these are Payment Service Providers. Payment Service Provider/Payment aggregator/Payment Facilitator work on a “full-service basis” meaning they control whole payment cycle.

Payment Aggregator=Gateway providers+ Acquirers+ payment processors.

Payment Aggregator receives payments from customers on merchant’s behalf. Finally transfers the payments to merchants in batches after a period.

Need for Payment Aggregator:

  • Using a payment aggregator, businesses can avoid the need to set up and manage their own payment processing systems, which can be complex and expensive.
  • Traditionally, merchants who wants to begin accepting card transactions needed to set up a merchant account which is a complex and time-consuming process.
  • Payment facilitators solve this problem by signing up merchants directly under its own merchant identification number (MID) to process transactions through a single master account.

Key Features of Payment Aggregators:

  • Secure Payment Processing
  • Fraud Detection and Prevention
  • Payment Tracking and Reporting
  • Settlement and Reconciliation
  • Simplified Integration
  • Merchant Dashboard

Top Payment aggregators in the industry:

  • PayPal
  • Stripe
  • Square
  • Paytm
  • Pay U
  • Razor Pay

Tech Trends in the market:

Digital payment methods saw massive developments in the span of four to five years, and we are about to see even more changes in the coming future. We will look at some of those digital payment market trends that will make it big soon.

1. Biometric authentication:

The biometric verification offers a two-factor payment authentication. It includes methods such as fingerprint scanning, facial recognition, and iris recognition to make a payment. Implementing this technology into your payment stack reduces fraud and makes the payment gateways safe and secure for both the business and the customer.

2. Top-rated security powered by AI and Machine Learning:

AI has been a proven game-changer in the payments industry. It has offered to use the technology in innovative ways, such as voice-activated payments and chatbots for providing reports, balance notifications, and round-the-clock customer service to its users.AI and ML-based platforms help in reducing payment fraud, help interpret insights, and scale up as per the customer requirements.

3. Regtech:

Regulatory technology, or regtech, is being used to automate compliance processes and reduce the risk of financial crimes. This includes tools for anti-money laundering (AML) and know-your-customer (KYC) compliance.

4. Devices wearable for payments:

The wearable tap-and-go technology integrated into smartwatches, wristbands, or rings is a secure and error-free method for customers to purchase products and services. Private banks have also been launching wearables and contactless payment gadgets.

5. Blockchain and Cryptocurrency:

Blockchain technology is being used to create new financial products and services, such as decentralized finance (DeFi) and non-fungible tokens (NFTs). Cryptocurrencies, such as Bitcoin and Ethereum, have become more mainstream, and are being used as a form of payment by some businesses.


As technology continues to advance and consumer preferences change, it is likely that we will continue to see new trends and innovations in the payment ecosystem. Regulations will play a critical role in ensuring the safety and security of payment transactions while promoting competition and innovation in the industry.

We hope you found our blog post informative. If you have any project inquiries or would like to discuss your data and analytics needs, please don't hesitate to contact us at We're here to help! Thank you for reading.
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