Understanding The Difference: Payment Gateway vs Merchant Account

Merchant accounts - credit card processingThe Internet presents the greatest opportunity for any business looking to make money however there is a problem, how to get money from the consumers when they want to purchase products and services. There are two important facilities that must be in place in order for credit card payments to take place. It will require merchant account and a payment gateway to make the process work.

What’s a Merchant Account?

A merchant account is a special account that enables a merchant to receive funds from the major credit card companies around the world. An individual could not just walk up to a major credit card company and ask them to process credit card payments. The merchant bank account is a special relationship between a bank that has a relationship with the major credit card companies and the merchant and acts as an intermediary between both parties. The merchant bank account provider is ultimately responsible for all transactions that take place so they must ensure the merchants they do business with are legitimate.

When a company is applying for a merchant payment account like the ones offered by USA ePay they will need to have good credit and offering a legal product or service. Since there is a heightened risk of fraud with online transactions the merchant will need to be very clear with their websites privacy policy and have a secure and encrypted payment page. This is where the payment processing gateway comes into play.

And What’s a Payment Gateway?

Payment gatewaysA payment gateway is specialized technology that enables a consumer to enter his/her credit card information without physically swiping their card. In order to reduce the chances of fraud, the gateway must get very specific information from the consumer that only the authorized cardholder would know. Since not every of these gateways offer the same level of compliance with the credit card companies an individual would need to consider a firm like Authorize.net for their needs. When the gateway is set up on the website and linked with the merchant bank account the business owner is able to start receiving money from their clients that are paying for products and services. While the process sounds very complex it is actually quite simple and once it is done a business will be able to realize heightened levels of profitability.

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