Difference Between Payment Gateway And Merchant Account

Merchant account is the bank account of retailer that permits payments from the debit or credit cards of the consumers

. On the other hand, payment gateway is not a bank account yet it only serves as a terminal for authorization and verification of transactions in debit or credit card processing.

Payment gateways and merchant account are sometimes speculated as one for the point that both works with financial transactions. But in fact they are both completely different from one another even though they are allies when it comes to financial transactions and online marketing business.

What is merchant account?

Merchant account is a form of bank account that permits debit or credit card payments for services or any goods provided in any company. It essentially deals with all the financial transactions in your company such as credit card payments.

Many people decided to use a merchant account since it has wonderful advantages to both the consumers and the retailers. To the customers, it helps them save time and answers the trouble of paying payments that are cash-only. They can purchase expensive items too from shops without being concerned about bringing considerable sums of money on their purses. To the retailers, it helps them from consistently sorting all the checks and cash in their company because almost everything can be carried out electronically.

Having a merchant account is not simple and it is not for free. It means that account providers demand fees to each and every services and transactions completed in the merchant account. That's the reason why there are policies, terms, and conditions that sellers should completely understand and some things that sellers should think about before a merchant account can be accepted by any account providers. Most of these aspects are very important too especially to account providers since these factors will provide them the guarantee that your company would be solid enough to protect against financial crisis or economic instabilities because account providers are also affected when that occurs.

What is payment gateway?

Payment gateway, on the other hand, is not a banking account but it acts as a verification and authorization agent on the part of the retailer. Payment gateway is the middle line between the online store of the retailers and the financial transactions between the debit and credit card of the consumers to the merchant account of the retailers. It works as a terminal for credit or debit card transaction and validation details encryptions.

Payment gateways are extremely useful in Internet transactions. It is in Internet transactions that a payment gateway is linked to a merchant account.

As you can observe from this payment gateway to merchant account comparison, there is a real lot going on while you are sitting there waiting to check out. Think of it when you do a credit purchase next time. It normally takes place so fast and with the aid of the internet, you can notice that your financial transaction will be completed before you get through the processing yourself!

by: Aaron Wylie

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