A few definitions before we all get confused about who's who.

Paystation: that's us.
Developer: that's you.
Merchant: the shop owner - the one who holds the Merchant account either at the bank or with Pago. Usually they are your customer, and our customer, but they're not the end customer.
Customer / Card Holder: the end customer - the one who is buying goods or service.

This is how we refer to the different roles in documentation, over email, and when talking over the phone.

3-Party vs. 2-Party Processing
Every account is technically able to transact via 2-Party and 3-Party at the same time, and turning the interfaces on and off is a matter of policy (if the bank says yes then we turn everything on).

3-Party (hosted) Processing
Most payments will be 3-party (or hosted payment pages), which have three advantages:

• the card holder puts card numbers into bank or pago branded screens;
• the merchant never sees card numbers;
• and things like PCI compliance and 3DS authentication are our problem and not yours or your Merchants.

Here a look at Paystation's 3-Party API document

Return Url:
For 3-Party payments we need to know where to send the response to. We call this the 'Return URL', and we need you to tell us what the return URL will be for each merchant you integrate, including your development account.

2-Party Processing
Sometimes you need more control, and 2-party might be the thing for you - this is where you gather the card number your application sends it to us as an HTTPS POST and we come directly back to your application with an XML response. Call centres use 2-Party, as do some really big online merchants.

Here a look at Paystation's 2-Party API document