Merchant Accounts and payment gateways are two major services that enable e-commerce in a store or online. They provide the technical means to accept credit cards, debit cards, checks and electronic checks from your customers. These services help keep track of orders, shipping information and other billing related data in an organized manner for better customer service experience.
A payment gateway is a software that authorizes payments for online purchases. It validates the user’s information and communicates with merchant accounts to authorize or decline a transaction based on its risk score. Some examples of popular gateways are Authorize.net, PayPal Pro, Amazon Payments, Google Checkout etc.
In simple words: A gateway is a mechanism that connects your shopping cart to a payment processor.
A payment gateway performs various functions for online transactions, including:
A merchant account is a type of financial account or banking arrangement offered by banks and alternative financial institutions to businesses allowing them to accept payments from customers using debit cards, credit cards, and other similar methods. A merchant account allows a merchant to accept payment from customers via credit cards, debit cards, checks, and electronic funds transfers. A merchant account can typically be set up in a matter of days with a business checking account.
In simple words: A Merchant Account is where money comes in for your sold items or services.
Extensive information on the differences between Merchant Accounts and Payment Gateways is available on the official website of Intuit.
Here’s a useful video explaining how to connect to both Merchant Account and Payment Gateway:
Well, that’s it about the basics of Merchant Accounts vs Payment Gateways. We hope you found this article informative and useful.
