Payment gateway systems allow customers to buy products and services from your online store easily. They capture payment data and forward it to the acquiring bank, which processes the transaction. You might be under the impression that your business requires only one or the other, but that’s not necessarily true. Your company needs a merchant account and a payment gateway to accept credit card payments.
Cost
Whether you sell products online or in person, you must ensure your customers have a seamless, safe checkout experience. A merchant account and payment gateway are vital for any eCommerce business. They allow you to take credit card payments from your customers and deposit them in your bank account after a successful transaction. A merchant account is a type of bank account that enables you to accept credit and debit card payments from your customers. On the other hand, payment gateways connect a business’sbusiness’s merchant account to its website or other sales channels. They also enable businesses to process payments through mobile apps and other media. They may also offer features like smart chargeback management, invoicing and customer reminders, and easy integration. Choosing a merchant account and payment gateway provider that offers both services can save you money. In addition to reducing your fees, it can also help you avoid unnecessary risks. It would help to always ask your provider about its fees, terms and conditions, and any additional hidden costs before deciding. You should also find out if your provider has any processing caps.
Security
If you’re a newbie in online payment processing, merchant account vs payment gateway might need clarification. Many people believe that you need one or the other, but the truth is that both serve different purposes and that your business needs both to accept credit card payments from customers. A payment gateway system allows you to collect payments through your website, giving customers more options to complete their purchases. It’sIt’s also a security measure, keeping sensitive customer information safe from cyber attacks and fraud. It’sIt’s a great addition to your e-commerce platform, especially as small and medium-sized businesses are experiencing record numbers of cyber attacks.
A payment gateway can also simplify your business’s transaction process when coupled with an existing merchant account. For instance, a payment gateway can collect all of the deposits from your different online sales channels into one deposit for your business bank account, making it easier to keep track of transactions. A merchant account is a business bank account that holds your payment transactions until they are verified and passed to your business’sbusiness’s bank accounts. A merchant account can help you manage risk by conducting fraud checks and flagging suspicious payments before they reach your business bank account. It can also help you manage your invoicing process by allowing you to distribute funds for customer refunds and returns from your merchant account.
Flexibility
While they are often confused, payment gateways and merchant accounts have different jobs. A merchant account is an e-commerce or retail bank account that collects and stores the money from your customer’s credit card payments, while a payment gateway enables you to accept cards for purchases. These two pieces of technology are crucial in a business’s ability to accept card payments online and increase incoming cash flow. Most businesses need a payment gateway and a merchant account to process credit card payments. Still, some have unique needs that may make one solution more advantageous. For example, a high-risk merchant account allows businesses in potentially risky industries to accept credit card payments without the approval of a traditional bank. Although higher transaction fees are associated with this type of account, it is suitable for high-volume and global firms. A payment gateway connects your website and your merchant account, ensuring that information about the buyer’sbuyer’s credit card is passed securely to the bank for processing. It can be purchased separately from the merchant account or as part of a complete payment solution with an acquiring bank or PSP. The best gateways offer multiple payment methods, smart chargeback management, a dedicated fraud protection team, and integration with other systems to simplify bookkeeping.
Convenience
Merchant accounts and payment gateways are two closely connected business tools that can make or break a business’s ability to accept credit card payments. Despite frequent confusion, the phrases serve different purposes. A payment gateway is the consumer interface that allows for a customer’s customer’s credit card information to be collected. In contrast, a merchant account contains the funds from those transactions and deposits them into a business bank account. While merchant accounts have been around for a while, we have only recently seen the rise of payment gateways. Payment gateways are made more user-friendly, and some may provide various payment options, which is perfect for companies looking to expand their consumer base as much as possible. Furthermore, specific payment gateways are created to be more international, making them a better option for big multinational companies that need to increase and serve clients on several continents. A payment gateway and a merchant account are necessary for any business that wants to accept credit cards as payment. Understanding the differences between these two business tools helps ensure that a company uses the right technology to meet its needs. The right combination of a payment gateway and a merchant account can help ensure a business can accept credit card payments without any hassles or issues.
