Difference between Merchant Account, Payment Gateway and a Payment Processor

Online payment system facilitating ecommerce business owners to grow their trades with unlimited volume backed with fully integrated payment solution at very low cost. Payment Gateway is not only the source for supporting this payment processing instead there are multiple entities involved to accomplish such high risk online transactions.

Actually, there are three main bodies responsible to complete an online payment transaction. Payment Gateway, Payment Process and Merchant Account are the main dynamics allows completing online payment processing. Understanding the difference between them and their role is very important for everyone, especially if someone seeking online payment system.

What is Payment Gateway?

Payment Gateway is an entranceway for online payments. It allows customers to pay money online using various modes like credit card, net banking and debit card etc. A customer buying a product from an Ecommerce pays money online into the merchants account. Payment Gateway acts like a mediator to authenticate each transaction and process the data from one bank account to another with complete safety and privacy.

Role of Payment Gateway

The role of payment gateway is to act like a mediator between the transaction taking places from your portal. Actually, due to security reasons, there is need for mediator that can help to transmit information of transaction directly from customers account to payment processor. Nowadays, most of the merchant accounts come with payment gateway. The main role of payment gateway is to act like an intermediary between customer and service provider.

What is Payment Processor?

Under online payment gateway system, Payment Processor or also known as acquirers who are mainly banks or financial institutions that work in the backed to supply all the services related with payment processing required by an online merchant. Actually, these syndicates usually partnered with other company that deals with customers or merchants. However, few of the processor also provides direct merchant service but most of them keep emphasis on processing services only. These payment processors usually don’t promote their services instead prefer to act in background for processing payment for (ISOs) and Member service providers (MSPs).

What is a Merchant Account?

Merchant account is similar to bank account that approves each transaction and accepts money paid through debit or credit card etc. Anyone having a website looking to transact through this website needs a merchant account. Payment gateway for tech support business runs through a merchant account opened by service provider through a website.

Merchant account can be opened at banks and many payment processors or payment gateway service provider offer merchant accounts service. Independent sales organizations (ISOs) or Member Service Provider (MSP) also provide this account and these entities have agreements with the payment processor to offer such merchant services.

There are many payment processors, merchant account service provider and payment gateway service provider, all have their own criteria to provide their service, their monthly charges are different, their transaction cost are different and they all are different from each other in terms of various aspects. But without these entities it is not possible to complete any online payments.

 

 

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