What is the term for a hardware-based or software-based system that mediates between a merchant and an acquirer?

The term for a hardware-based or software-based system that mediates between a merchant and an acquirer is known as a payment gateway. A payment gateway serves as a conduit that facilitates the transfer of transaction information from the customer to the merchant and from the merchant to their acquirer, enabling the processing of payments securely.

Payment gateways perform several crucial functions in the transaction process, including encrypting sensitive payment information for security, authorizing transactions by communicating with financial institutions, and ensuring that payment confirmations are sent back to the merchant. They play an essential role in e-commerce by allowing businesses to accept various types of electronic payments, such as credit cards, debit cards, and other digital wallets.

In this context, although payment processors and transaction processors are related terms often used in the payments ecosystem, they typically refer to different components involved in processing payments. A merchant account specifically refers to a bank account that allows businesses to accept payments from credit and debit cards, rather than the mediation process itself.

Overall, a payment gateway is critical for ensuring that the payment process flows smoothly and securely, making it the correct answer in this scenario.