The payment processing industry is not a single category of companies, it’s a layered ecosystem of specialized players, each performing different functions in the chain that moves money from customer to merchant. Understanding who’s who helps you evaluate payment providers correctly, ask the right questions, and choose infrastructure that fits where your business is going.
Layer 1: Card Networks
Visa, Mastercard, American Express, and Discover operate the communication rails that connect issuers to acquirers. Card networks set the rules (interchange rates, chargeback policies, fraud requirements), operate the global messaging infrastructure, and charge network assessment fees. They don’t directly hold money, they facilitate the system.
Key players: Visa, Mastercard, American Express, Discover, UnionPay (China)
Layer 2: Issuing Banks
The bank that issued your customer’s credit or debit card. The issuer decides whether to approve or decline each transaction, funds the cardholder’s purchases, and collects interchange fees on each transaction. The issuing bank is the largest fee recipient in the payment chain.
Key players: JPMorgan Chase, Bank of America, Citi, Capital One, Wells Fargo (and thousands of smaller banks and credit unions)
Layer 3: Acquiring Banks
The financial institution that holds the merchant’s account and connects merchants to card networks. Acquirers are registered Visa/Mastercard members who bear financial liability for the merchants they sponsor. Becoming a direct acquirer requires substantial capital, compliance infrastructure, and card network approval.
Key players: Adyen, JPMorgan Chase (Chase Merchant Services), Fiserv, Global Payments, Worldpay, Bank of America Merchant Services
Layer 4: Payment Processors / Technology Companies
Companies that provide the technology layer, gateways, APIs, fraud detection, reporting, often on top of an acquiring relationship. Many modern processors are also direct acquirers (Adyen, Stripe via their banking partnerships). Processors provide the merchant-facing technology while the acquirer handles the banking relationship.
Key players: Adyen, Stripe, Braintree (PayPal), Checkout.com, Worldpay
Layer 5: Payment Facilitators (PayFacs)
PayFacs are registered with card networks as master merchants. They onboard sub-merchants under their master MID, enabling fast merchant onboarding without full bank underwriting. PayFacs handle their own risk underwriting and are responsible to card networks for their sub-merchant portfolio. Modern PayFacs combine payment technology with PayFac infrastructure.
Key players: Stripe, Square, ConvesioPay, Lightspeed Payments, Shopify Payments
ConvesioPay operates as a PayFac on Adyen’s direct acquiring infrastructure, combining PayFac-model merchant accessibility with Adyen’s institutional acquiring capabilities.
Layer 6: ISOs and Agents
Independent Sales Organizations (ISOs) resell acquiring services from a sponsoring bank without being acquirers themselves. ISOs typically focus on merchant acquisition and relationship management, while processing happens through their sponsoring bank or processor. Many traditional brick-and-mortar payment relationships go through ISOs.
Key players: Heartland Payment Systems, National Processing, Dharma Merchant Services, and thousands of smaller regional ISOs
Layer 7: Aggregators
Aggregators pool many merchants into a shared merchant account, offering the fastest onboarding but the least account stability. Early Stripe and Square operated as aggregators; most have evolved toward the PayFac model as they’ve matured and acquired direct acquiring relationships.
Where ConvesioPay Sits
ConvesioPay operates at Layer 5 (PayFac), with access to Layer 3 (Adyen’s direct acquiring) infrastructure. This positioning provides the best of both worlds for WooCommerce merchants: fast PayFac onboarding with the authorization rate performance of institutional direct acquiring. Flat rate: 2.9% + $0.30, no monthly fees.
Ready to get started? Learn more about ConvesioPay or view pricing.