by 
The Curious Bag
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A credit card processor refers to a third-party entity that is responsible for processing the information associated with credit card charges between the card issuer, merchants and merchant account providers.
How They Work
Whenever you make a purchase using your credit card, information has to be exchanged between the credit card company that you used to buy a service or product and the merchant who sold the product or service to you. A credit card processor handles the processing of this information.
Responsibility
A credit card processor must assure that a person has enough credit available on the credit card for the charge to go through.
How It Affects You
The types of credit cards that merchants accept usually depends on the credit card processor that they are using. Certain processors only handle specific credit card companies.
Price
Credit card processing companies charge both the credit card company and the merchant a small percentage of the sale every time they process a transaction.
Identity Theft
Credit card processors usually play an important role in identity theft cases because they hold a wealth of valuable pieces of information necessary to figuring out exactly what happened.
Source:
Resource:
Credit Card Processing Review
Business.com: Credit Card Processing
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