A third-party payment processor is a service that allows a company to take payments without having its own merchant account, which is required to keep the money collected from card purchases.

These processors often provide quick installations, flat-rate fees, and process transactions from several businesses into pooled merchant accounts in order to decrease operational expenses.

Third-party payment processors, also known as third-party payment systems, are processors that are not linked with specific banks or merchant service providers and allow your organization to take payments without the requirement for its own merchant account.