Merchant Account Vs Payment Gateway –
Know the Difference
There are two types of payment processors- merchant accounts and payment
gateways. Both these services allow businesses to take credit card payments
from customers. However, there are some key differences between the two that
you should know about before choosing a payment processor for your business.
A merchant account is a type of bank account that allows businesses to accept
credit card payments. In order to open a merchant account, businesses must first
apply and be approved by a bank or credit card processor. Once approved,
businesses will be given a merchant ID number which will be used to process
credit card transactions.
A payment gateway, on the other hand, is a type of software that allows
businesses to accept credit card payments online. Payment gateways are
typically provided by third-party companies and must be integrated with a
merchant account in order to work.
So, which one should you choose for your business? The answer depends on a
few factors, including the type of business you have, your sales volume, and
whether or not you plan on accepting credit card payments online.
If you have a brick-and-mortar business, you'll likely need a merchant account in
order to accept credit card payments. Merchant accounts are typically more
expensive than payment gateways, but they're also more versatile and can be
used for things like point-of-sale transactions and over-the-phone orders.
If you have an online business, you may be able to get away with just a payment
gateway. Payment gateways are typically less expensive than merchant
accounts and can be used for things like e-commerce transactions and recurring
billing.
Ultimately, the decision of whether to choose a merchant account and payment
gateway comes down to your specific business needs. If you're not sure which
one is right for you, we recommend speaking to a payment processing expert
who can help you decide.