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Third-Party Payment Providers: Guide for U.S. Businesses (2025)

Mike Renaldi

23.09.25

Read time 7 minutes

The U.S. market offers numerous solutions for businesses looking to process online payments efficiently. Third-party payment providers serve as the backbone of e-commerce and in-person transactions for growing businesses, particularly with teams of 10 or more people.

This comprehensive guide examines what these providers offer, how they function, the different available options and how to select the right one for your business needs. We'll also discuss the Wise Business account. The global account that can help your company with all things cross-border.

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What Are Third-Party Payment Providers?

Third-party payment providers are financial service companies that facilitate transactions between merchants and customers. They manage the entire payment process, from authorization to settlement, without requiring businesses to establish direct relationships with banks or financial institutions.¹

How do these providers actually work in practice? These providers function as intermediaries, processing payments through various channels including credit cards, debit cards, digital wallets and bank transfers. For growing U.S. businesses, they eliminate the need to obtain a merchant account directly from a bank, a process that can be both time-consuming and complex.

Understanding the world of third-party payments begins with familiarizing yourself with the key terminology and definitions.

The Difference Between Processors, Providers and Gateways

The terminology in the payment processing industry can be confusing. Here’s a clear breakdown:

Third-Party Payment Processors

Third-party payment processors handle the technical aspects of moving money from a customer’s account to a merchant’s account. They verify available funds, authenticate transactions and transfer the appropriate amounts. Companies like Square and Stripe are prominent examples of third-party payment processors.²

Third-Party Payment Providers

This broader term encompasses companies that offer complete payment solutions. They typically include processing capabilities plus additional services such as fraud detection, customer support and reporting tools.

Third-Party Payment Gateway

A third-party payment gateway is the technology that connects your website or point-of-sale system to the payment processor. It encrypts sensitive data and securely transmits transaction information. Some providers offer both processing and gateway services in one package.³

Now with a good grasp of the terminology, let’s consider how using third-party payment providers can benefit your business.

Benefits of Using Third-Party Payment Providers

Cost Efficiency

For small to medium-sized businesses, third-party payment providers typically offer more affordable solutions than traditional merchant accounts. They generally charge a flat percentage fee per transaction (ranging from 2.5% to 3.5%) plus a small fixed fee (usually 15 to 30 cents).⁴ This pricing model eliminates the need for monthly minimums or long-term contracts that traditional merchant accounts often require.

Quick Setup

Most third-party payment processors offer streamlined onboarding processes. Businesses can typically begin accepting payments within days rather than weeks, making it ideal for companies that need to rapidly scale their payment capabilities.

Multiple Payment Methods

Modern consumers expect payment flexibility. Third-party payment providers allow businesses to accept various payment methods including:

Credit and debit cards
Digital wallets (Apple Pay, Google Pay)
ACH transfers
International payment options

Advanced Security

Reputable providers implement robust security measures including encryption, tokenization and algorithms which detect fraud. They maintain compliance with Payment Card Industry Data Security Standard (PCI DSS) requirements, reducing the security burden on your business.⁵

Integration Capabilities

Most third-party payment providers offer APIs and plugins that integrate with popular e-commerce platforms, accounting software and customer relationship management systems. This seamless integration streamlines operations and reduces manual data entry.

Here are some of the most popular third-party payment processors trusted by businesses across the U.S.

Popular Third-Party Payment Processors in the U.S.

Stripe

Stripe has grown in popularity among U.S. businesses due to its developer-friendly platform and extensive customization options. Their pricing starts at 2.9% plus 30 cents per successful card charge; custom packages are also available for businesses processing over one million annually.⁶

You can connect Stripe with Wise Business. You can link your EUR, GBP, USD, AUD, NZD, SGD, RON, and CAD account details with Stripe. The supported currency can depend on your location.

PayPal

As one of the oldest and most recognized third-party payment providers, PayPal offers comprehensive services including invoicing, subscription billing and in-person payments. Their standard rate is 2.99% plus 49 cents per transaction for online payments.⁷

Square

Square began as a mobile payment solution, but has expanded to offer a complete payment ecosystem. Their pricing starts at 2.6% plus 15 cents per tapped, dipped or swiped transaction, making them competitive for businesses with higher average transaction values.⁸

Authorize.Net

This veteran third-party payment gateway focuses on security and reliability. They charge a monthly gateway fee of $25 plus 30 cents per transaction, but offer volume discounts for businesses processing over $500,000 annually.⁹

Adyen

Popular among larger businesses, Adyen provides a unified commerce solution with global reach. Their pricing model is transaction-based with no setup fees or monthly charges. For each transaction, they charge a fixed processing fee plus a fee determined by the payment method. Conveniently, you also have the option to choose the currency that you want to settle with.¹⁰

With the leading providers identified, let’s delve into how to select the best option for your business.

Selecting the Right Third-Party Payment Provider

Assessment Criteria

When evaluating providers, consider these key factors:

Fee Structure: Compare processing fees, monthly charges, setup costs and potential early termination fees. Some providers charge higher rates and offer more comprehensive services, while others maintain lower fees and provide fewer features.
Payment Types Accepted: Ensure the provider supports all payment methods your customers prefer. According to the Federal Reserve Payments Insight Brief, 33% of Americans are using digital wallets in 2023, an eight-percent increase from the year before.¹¹
Security Features: Look for providers that offer fraud detection, chargeback prevention and Address Verification Service. The right security features can save significant money; the Association of Certified Fraud Examiners’ 2024 report estimates that organizations lose approximately 5% of revenue to fraud each year.¹²
Settlement Time: The timeframe for receiving funds varies significantly among providers, ranging from same-day to seven or more business days. Faster settlement improves cash flow but might come with additional fees.
Customer Support: Access to responsive support can be crucial during payment issues. Evaluate the provider's support channels, hours of availability, and reputation for resolving problems promptly.
Scalability: Choose a provider that can accommodate your business growth. Some offer tiered pricing that becomes more favorable as transaction volume increases.
Cost: Most third-party payment providers charge a percentage of each transaction, typically 2.5% to 3.5%, plus a fixed fee, usually 15 to 30 cents. Some also charge monthly fees, setup costs or fees for additional services like chargeback management

It’s important to weigh the pros and cons, so let’s review some of the drawbacks of third-party processing.

If you’re also selling on Amazon, on a range of marketplaces, you can withdraw your multi-currency earnings into your Wise Business account. By doing this, you’ll avoid paying high currency conversion fees.

Challenges with Third-Party Credit Card Processing

Account Stability

Third-party payment processors typically aggregate multiple merchants under a single master account. This arrangement makes them more sensitive to unusual transaction patterns, which can sometimes lead to account holds or terminations. High-risk industries, such as CBD products, subscription services, or businesses with high chargeback rates, may face additional scrutiny.

Limited Customization

Some providers offer less flexibility in customizing the checkout experience compared to direct merchant accounts. This limitation can impact branding consistency and conversion optimization.

Higher Fees for Volume

While third-party payment processors are cost-effective for low-volume merchants, businesses processing over $50,000 monthly might find traditional merchant accounts more economical in the long run, as they typically offer volume-based discounts.

If you do decide that a third-party payment provider is right for your business, it’s important to have an integration plan.

Integration Considerations for Third-Party Payment Gateways

Successful implementation of a third-party payment gateway requires careful planning. Key considerations include:

Technical Requirements

Evaluate your current systems and determine what modifications might be necessary. Most providers offer documentation and support for integration, but the complexity varies based on your existing infrastructure.

Testing Protocol

Implement a thorough testing process before going live. This should include test transactions across all payment methods and scenarios, including refunds and partial payments.

Mobile Optimization

With mobile commerce accounting for 41% of e-commerce sales in the U.S., ensure your chosen provider offers a seamless mobile checkout experience.

In summary, understanding the key aspects of third-party payment processing can help you make informed decisions for your business.

Conclusion

Third-party payment providers offer growing U.S. businesses a convenient and efficient way to process customer payments. By understanding the different types of providers, evaluating the available options and selecting the right partner for your specific needs, you can optimize your payment processing system to support growth while minimizing costs and risks.

The right provider will grow with your business, offering scalable solutions that adapt to your changing requirements. We recommend taking your time to thoroughly research your options, request demos and speak with representatives to ensure you choose a partner that aligns with your business objectives and will be able to scale with your growth.

To help you navigate the complexities of third-party payment processing, we’ve compiled answers to some of the most frequently asked questions. Whether you’re curious about fees, security, or how these providers integrate with your business, this FAQ section covers the essentials. Our goal is to provide clear, concise information that empowers you to make informed decisions and choose the best payment solution for your needs.

Frequently Asked Questions

What is a third-party merchant account?

A third-party merchant account is a type of payment processing account where a provider aggregates multiple merchants under a single master account. This arrangement simplifies setup but may offer less stability than dedicated merchant accounts.

How do third-party payment processors differ from direct processors?

Direct processors require businesses to establish their own merchant accounts with acquiring banks, involving more paperwork and longer setup times but potentially offering lower rates and greater account stability. Third-party payment processors aggregate multiple merchants under shared accounts, providing faster setup but potentially higher fees.

Are third-party payment gateways secure?

Reputable third-party payment gateways employ robust security measures including encryption, tokenization and fraud detection. They should comply with PCI DSS requirements and regularly update their security protocols.

Can international businesses use U.S.-based third-party payment processors?

Yes, many U.S.-based processors support international merchants, though they may charge additional fees for currency conversion or cross-border transactions. Some may have country restrictions or require additional documentation.

How quickly can I access funds processed through third-party payment providers?

Settlement times vary by provider, ranging from same-day to seven or more business days. Many offer expedited funding options for additional fees. As your processing history builds, some providers may offer faster standard settlement times.

Sources:

*Please see terms of use and product availability for your region or visit Wise fees and pricing for the most up to date pricing and fee information.

This publication is provided for general information purposes and does not constitute legal, tax or other professional advice from Wise Payments Limited or its subsidiaries and its affiliates, and it is not intended as a substitute for obtaining advice from a financial advisor or any other professional.

We make no representations, warranties or guarantees, whether expressed or implied, that the content in the publication is accurate, complete or up to date.

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