There are a few differences. First, a payment gateway is the technology that encrypts and transmits payment data to the payment processor. From there, the payment processor transmits details of the transaction to the customer’s card-issuing bank and the acquiring bank of the merchant. They also differ based on how a customer is paying. While payment gateways are mainly used for eCommerce, credit card readers, POS systems, and software connections, payment processors are necessary for any card-based transaction.