Payment Gateways vs. Merchant Accounts

When customers buy something from your physical store, they swipe their card through an electronic card reader. It might be attached to the cash register, or it might be a portable unit that your server, delivery person, or shop assistant brings to you. On the other hand, when they’re buying something on your website, they normally type their card details into their web browser.

The browser takes the place of the card reader, and the customer’s card information travels from the Internet to the banking network by using a payment gateway. A payment gateway allows your customers to use their card on your website or mobile app, moving the cash from their credit card account to your merchant account. Without that payment gateway, your customers wouldn’t be able to use a credit card to pay for your goods or services online.

Qualities of a good payment gateway

Customers can either pay directly at your online store or they can be sent to a different website to use a third-party payment processor. Either way, they will be using a website to make their payment. The website must have SSL certification, which is verified by having ‘https’ urls or a padlock icon in their address bar. It should also have high-grade data encryption and be PCI QIR compliant.

The payment gateway takes the payment information from the Internet, and transmits it through the banking network to payment processors. The payment processors allow your merchant account to, ultimately, connect to your customer’s account associated with their credit card, debit card, or ACH-linked bank account (Automatic Clearing House, which are electronic bank-to-bank transfers.)

The necessity of a merchant account

As a merchant or businessperson, you will can open a merchant account with a payment processors. When your customer pays you, the merchant processor will facilitate the transactions between you and your customers and the money will typically reach your bank account in 24 to 72 hours. Your merchant account is essential because funds charged to a credit card can initially only be transferred to a merchant account.

Choosing the right payment processor

Payment processors have the right security measures and licenses to act as a go-between in the complex transaction that involves the customer, their bank, your bank, and you. Your merchant processor may also provide you with virtual shopping carts for your website, electronic card readers for physical card swiping, and mobile apps to accept payments on tablets or mobile phones. A good payment processor will charge you affordable fees that enhance efficiency while maximizing your profits.

For more information on the roles of payment gateways and merchant accounts, or to sign up for a merchant account, please call (888) 924-2743 or go to

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