Merchant Account vs Payment Gateway Explained

If you are confused by all the terms bandied about around accepting credit card payments you are not alone. Many small business owners feel intimidated by all the names and technical terms used in the card payment industry and are not sure if they can keep pace with it all. That is why choosing a reliable merchant card processing service provider is essential for small business owners. Partnering with the right merchant card processing service means that they will keep you abreast with everything that you need and everything that you need to know.

What is a Merchant Account?

A merchant account is effectively a bank account that enables your business to accept credit and debit card payment for goods and service supplied to customers. This account will receive all payments made by customers who paid for purchases by card, and you cannot accept any card payments unless you have a merchant account. Your merchant account operates as a banking account and runs from month to month reflecting transactions and charges. You can draw monthly statements and view your merchant account online at any time.

When you apply to accept card payments with a merchant card processing service provider, they will open a merchant account for your business as part of the process. Once you have completed an application that has been approved, the merchant account processing service provider will automatically open and assign a merchant account to you.

What is a Payment Gateway?

A payment gateway is a secure service provided by a merchant card processing service provider that allows your online business to accept credit card payments via your website. The payment gateway is what connects your website on the Internet to your merchant account processing service provider on the banking network. It transmits your customer’s transaction information from your website to your processor, and it transmits the results of that transaction back to your website.  It runs 24 hours a day, 365 days a year so you need not manage the process and customers can shop whenever it suits them. Credit card payments are immediately approved or declined, and you and your customer will both immediately be notified whether a transaction was successful.

When you sign up with a reputable merchant card processing service provider, the payment gateway software will be installed and integrated with your existing website at no additional cost to you. And you need not be concerned that the existing security of your site will be compromised; all merchant card processing service providers have to comply with strict regulations pertaining to the financial services board as well as industry-specific regulations. This ensures that the security of your website and ensures that your customers’ secure credit card information provided online will not be leaked to any third-party sources.

Choose the Right Merchant Card Processing Services Provider

When you choose a reputable merchant card processing services provider to partner with your business, they will explain and advise you on what you need to make your business more successful. Once the payment gateway software has been installed and integrated with the software of the checkout on your website, you will be able to accept online payments, and you can also get a virtual terminal that allows you to accept credit card payments over the phone, by mail, or face-to-face. All of the successful card payment transactions will be reflected on your merchant account, so your administration will be a breeze.

For more information about a merchant account vs. a payment gateway, or to sign up for a merchant account, please call (888) 924-2743 or go to

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