Online Merchant Accounts vs Credit Card Payment Processors

Online merchant accounts are an important investment for any business. They allow businesses to accept payments from their customers in their online stores. They sometimes also come with other benefits, including hardware and software solutions that add functionality to the business’s website. Financial experts agree that recent changes to customers’ expectations for online payment options will be permanent.

In preparation for these changes, it’s smart for businesses to take advantage of an online merchant account. In doing so, it is useful to know the services they include, as well as their potential for improving businesses and increasing profitability.

What is an online merchant account?

An online merchant account is a special kind of bank account that provides the ability to accept forms of online payment from customers. This typically includes both credit cards and debit cards. These merchant accounts can also be used for mail or telephone orders, face-to-face transactions, and mobile processing.

How payment processors differ from merchant accounts

In addition to providing merchant accounts, many merchant account providers also offer products and services that enable customers to purchase goods from online stores and businesses. Some also supplement this by providing the ability to accept additional forms of online payments, such as eChecks, ACH transfers, or cryptocurrency. They may also provide software or hardware that can enhance the merchant’s business, which some merchant account providers include at no cost.

Third-party credit card processing happens through a separate company that has a relationship with the online merchant accounts provider. This enables businesses to encrypt transactions and process them efficiently. Ultimately it is the payment processor that actually conducts the transaction and assumes any chargeback risk in the even the merchant cannot pay it or refuses to do so.

The Takeaway

Online merchant account providers and payment processors are usually two different entities, although both functions can occasionally be performed by the same company.

What are the advantages of credit card payment processors?

A credit card payment processor is sort of like an intermediary step before you get to the capabilities of a full-blown merchant account. But when evaluating an online merchant account vs. a credit card payment processor, it can be difficult to tell the difference, especially if you don’t know what to look for.

Also known as a payment gateway, a credit card payment processor is basically a partner that allows you to process payments. From credit cards to debit cards, echecks and other types of payments, a payment processor will handle each of your payments for a small fee taken out of each transaction on top of the normal processing fees. 

For those that want to get up and running as quickly as possible, a simple payment gateway or credit card payment processor is your best bet.

What are the advantages of online merchant accounts?

Compared to a credit card payment processor, an online merchant account gives you much more control over your financial situation. In addition to lower fees and a reduced delay in collecting payments in a timely manner, an online merchant account helps you improve your cash flow by reducing the barriers between you and your money. 

When it comes to fees, you’ll also pay less per transaction than with a credit card payment processor, which is one of the main reasons why businesses make the leap to an online merchant account. While you can certainly get by with either, a merchant account is typically the domain of larger businesses that want to get the most out of their credit card processing and avoid the delays and fees of typical credit card processing partners.

The best part is that can help you get set up with your own merchant account without the complicated setup and management that is commonly associated with online merchant accounts. Simply contact us today and let one of our expert associates help you design the right processing system for your business and your precise needs.

Payment processors collect, store, and transfer the payment information directly. Visit or call them at (888) 924-2743 to view online merchant account services and products that offer the lowest rates for businesses of any size.

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