You might have come across terms like ‘payment gateway' and ‘e-commerce payment processes'. But what does this all mean, and what does it mean for your business?
Let's look at Payment Gateways and Merchant accounts and what they involve:
Merchant Accounts
Merchant accounts allow your business to accept e-check, credit card and debit card payments. If your business is also on the Internet, you need to create a payment gateway when you set up your merchant account. You are then provided a shopping cart by your payment processor that customers use to purchase and products. Merchant accounts have the ability to automate your business. The most popular place for Internet businesses to have their merchant accounts is PayPal.com.
Payment Gateways
Payment gateways are direct links between the bank that processes the payment and the shopping cart. The whole process is conducted online, in real time and involves authentication, managing and processing of all online transactions. As soon as the payment is authorized, your business accesses the gateway user interface to complete the transaction.
A major distinguishing factor between payment gateways and merchant accounts is that one is the medium to make online payments, while the other is the license that permits credit card payments.
Having access to payment gateways does not automatically mean your business can accept credit cards. You need to apply for a merchant account before accepting credit card payments.
Acquiring both a merchant account and a payment gateway is an essential step to establishing a healthy online business – and both have proved to be a boon to e-commerce and simplified business operations.
