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Merchants often rely on payment processors to handle their payments and give them access to particular payment systems. Payment processors take the relevant information that merchants obtain from consumers (that is, bank account and routing number or credit or debit card number) and submit it in the appropriate form through a financial institution in order to process credit or debit card payments, ACH payments, remotely created checks, or payment orders. Payment processors include PayPal, Fiserv, FIS Global, First Data, TSYS, Vantiv, Global Payments, Jack Henry, Heartland, Cardtronics, and Square.

Payment processors are generally an intermediary between the merchant and a financial institution and do not interact directly with consumers, although some do. Nonbank parties that directly help consumers to send payments generally need to be licensed as a money service business under state money transmitter laws.34

Many legitimate merchants use payment processors to manage their payments and access the payment system. But payment processors can also play a role in facilitating fraudulent and illegal payments, as discussed in the following sections. Indeed, payment processors that serve legitimate customers may have rules prohibiting or limiting the processing of payments for certain high-risk industries, including payday lenders and debt collectors.35