Payment Processors and Payment Gateways are indeed two
completely different entities. However, the
author of this article is correct in his terminology. PayPal and Stripe are commonly confused as
Gateways given their e-commerce nature and sub group products offered by the
parent company. The key element that
distinguishes a Payment Gateway from a Payment Processor is that a Payment
Gateway will require you to establish a merchant facility with a Bank (Acquirer). In simple terms (for those unaware), a
Payment Gateway can be thought of as an interface between merchants and payment
processors. The Payment Gateway accepts
payment request from merchants and forwards this to payment processor for
further processing (i.e. Chase Paymentech).

When a merchant signs up with PayPal they are NOT
required to establish a merchant facility with an Acquirer, instead PayPal
handles this on the merchant’s behalf. PayPal
and Stripe allow a merchant to get up and running very quickly by setting up
the merchant facility for the merchant and offering them a Hosted Payment Page
solution that can be placed into any website very easily, for a nominal per
transaction fee. They are not to be
confused with PayPal’s Payment Gateway product called “Payflow.” Payflow is a low cost Payment Gateway product
offered by PayPal for customers who already have an existing processor or
merchant facility.