What is a “Third Party Processor?”

A Third Party Processor is an independent processor that is contracted with by a Acquiring Bank or Processor to conduct some part of the transaction processing process.

-Some of these Third Party Processors specialize in running and hosting networks of Point Of Sale (POS) terminals connected to their Host via dial out modem; they produce the software in the POS terminals as well as in their host, and route authorization requests to Visa or MasterCard as needed (MAPP, MDI, FDR, for example).

-Other Third Party Processors specialize in the Settlement of credit card transactions with Visa and MasterCard so that merchants can be paid (FDR for example).

-In the world of Internet Credit Card Processing, the Secure Payment Gateway Provider, such as authorize.net, is another type of Third Party Processor.

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