A payment processor is a company that handles transactions between buyers and sellers. When you make a purchase online or in a store, the payment processor securely transmits your payment information to the bank or financial institution to authorize the transaction. This ensures that the funds are available and that the payment can be completed. Payment processors play a crucial role in e-commerce and retail by providing the technology needed for credit card, debit card, and digital wallet transactions. Popular examples of payment processors include PayPal, Stripe, and Square. They help businesses accept payments easily and efficiently while ensuring customer data is protected.