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f you are already run an online business, you will most likely be familiar with merchant accounts. However, for those who are new to online business’, there are some differences between a payment gateway and a merchant account. Below we will go through some of the differences and a give you a brief insight on which is better for you.
Payment Gateway
The best way to describe a payment gateway is to use an everyday shop. When you take your items to the till, you most likely use a card machine to pay. Think of the payment gateway as a virtual card machine. Therefore, the payment gateway is enabling you to offer card payments via your site.
This process all runs through a secure payment form on your site and once the user hits purchase, the encrypted payment goes through the payment gateway, followed by the payment processor and card network. The final step is the transaction reaching the customers card issuer. Don’t worry, this process takes milliseconds.
Overall, payment gateways are perfect for people running online stores. By using a payment gateway, you will attract more customers due to the varied ways of paying online.
Merchant Account
In simple, a merchant account allows you to take multiple forms of payment on your online shop. This includes credit card, debit card, paypal and more. This is done through a contract including the card company and retailer. This process is as quick as any other and allows a fast, secure and flexible option when shopping on your store.
Overall, a merchant account is more ideal for a store that is primarily brick and mortar. This means that most if not all of their sales come from a physical shop.
Many stores use both payment gateways and merchant accounts. However, they do have differences and can boost your business in different ways.
