As a business owner, you have probably heard the terms “merchant account” and “payment gateway” used interchangeably. While they are both essential for processing credit card payments, there is a big difference between the two. A merchant account is a type of bank account that allows businesses to accept credit card payments. A top payment gateway, on the other hand, is a service that authorizes credit card payments for online retailers.
If you are confused about which one you need for your business, you are not alone. Here is a closer look at the difference between merchant accounts and payment gateways:
Merchant Accounts
A merchant account is a bank account that is used to accept and process credit card payments. In order to set up a merchant account, you will need to apply with a bank or credit card processor. Once your application is approved, you will be able to start accepting credit card payments.
There are a few things to keep in mind when it comes to merchant accounts:
• You will be charged a fee for each transaction that is processed through your account.
• You may be required to maintain a minimum balance in your account.
• You will need to have a physical location where customers can make payments (such as a retail store or office).
Payment Gateways
A payment gateway is a service that authorizes credit card payments for online retailers. If you have an online store, you will need to set up a payment gateway in order to accept credit card payments.
There are a few things to keep in mind when it comes to payment gateways:
• You will be charged a fee for each transaction that is processed through your gateway.
• You will need to have a shopping cart software in order to use a payment gateway.
• You will need to provide your customers with a way to make payments (such as a credit card form on your website).
Now that you know the difference between merchant accounts and payment gateways, you can decide which one is right for your business. If you are an online retailer, you will need to set up a payment gateway in order to accept credit card payments. If you have a physical location where customers can make payments, you will need to set up a merchant account.
Whichever option you choose, you will be able to start processing credit card payments in no time.
Advantages of merchant accounts and payment gateways
There are several advantages of using merchant accounts and payment gateways for businesses.
Some of the advantages of merchant accounts include:
• You can accept credit card payments from customers.
• You can process credit card payments in-person or online.
• You can set up recurring billing for customers.
Some of the advantages of payment gateways include:
• You can accept credit card payments from customers.
• You can process credit card payments online.
• You can set up recurring billing for customers.
• You can use a payment gateway to accept payments from other countries.
Now that you know the difference between merchant accounts and payment gateways, as well as the advantages of each, you can decide which option is right for your business. If you are looking to accept credit card payments, either option will work well for you. It just depends on your specific needs and preferences.
Both payment gateways and merchant accounts have their own distinct advantages that can benefit businesses in different ways. Whether you’re an online retailer or have a physical store, each option can provide your business with a way to accept credit card payments.