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What Is a Payment Stack? An Online Payment Solutions Guide

What is a Payment Stack?
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  • What Is a Payment Stack? An Online Payment Solutions Guide
Payments 101 for Merchants
1. Credit Card Payment Processing 101: Everything Merchants Need to Know
2. ACH 101: How Does an Automated Clearing House Work?
3. Payments 101: How Online Payment Processing Works
4. What Is a Payment Stack? An Online Payment Solutions Guide

What do payment processing companies mean when they say “payment stack?”

Simply put, a payment stack is all the components needed to create an online payment solution. There’s a variety of payment methods, processes and stakeholders required to create an effective solution for processing payments online. This guide will help you to understand the components of a payment stack and the concepts you need to understand.

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What are the Components of a Payment Stack?

Over the last decade, payment technology has advanced beyond simply allowing merchants to process credit cards. The robust collection of technologies and capabilities that come together to create modern fintech solutions are often referred to as “the payment stack.”

The term “payment stack’ is used to refer to all the technologies and components that a company uses to accept payments from customers. Collectively, the various technologies that a company like Rapyd brings together to offer a complete solution is their payment stack.

These are some of the components of a payment stack that work together to create a frictionless commerce experience for businesses, financial institutions and customers.

Fraud Prevention

As technology continues to progress, fraudulent activity continues to evolve. It should come as no surprise that retailers and other businesses are experiencing more data breaches than ever before. In 2019 alone, card fraud losses reached $28.65 billion (Nilson). An increase in fraudulent activity has made the ability to monitor and recognize fraudulent transactions an indispensable component of any payment stack.

Settlement and Reconciliation

As your company scales up, the volume of purchases can become overwhelming. Payment reconciliation ensures that all payments made are recognized and handled accordingly.

Companies need payment reconciliation because it prevents the company from losing data or misplacing entries and even receipts. It’s best to keep a record of every transaction within the company by using accounting software, but also outside of the company. This is done by checking records with the banks that record the transactions. If a mistake is made, simply align your company’s records with bank statements to find the source of an error.


Building a full payment stack platform requires financial reporting services. Every company tied to credit card processing has to record a list of important data for every transaction made. These reporting components should be accessible at any time in the form of a summary and detailed versions.

  • Transactions activity
  • Chargebacks
  • Processing expenses and fees
  • Funding
  • Commissions (for resale companies)

Payment Gateway

The payment gateway is what approves the transaction process between the merchant and customer. Payment gateways allow merchants to accept payments online by connecting the processors and the service providing the payment system to the merchant.

Checkout Interface

A good checkout interface makes it easy for customers to see pricing in their local currencies and to find and use their preferred local payment methods. The checkout interface is a critical component of your website experience and important for making sure you don’t lose customers that want to buy from you.

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Photo by Nicole Wolf from Unsplash.

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