Merchant Account vs. Payment Gateway

Nearly every type of business – from big box retailers to Etsy sellers, and from trade show vendors to antique dealers – needs to accept credit card payments to survive. And more and more of those businesses are accepting payment online.

If your business already accepts credit cards, you’re likely familiar with merchant accounts. But if you’re new to e-commerce, you’re probably learning about payment gateways. What’s the difference between the two? And what are the advantages and disadvantages of merchant accounts versus payment gateways?

BluePay offers both, so we decided to break it down for you.

Merchant account vs. payment gateway: What’s the Difference?

A merchant account lets your business accept multiple forms of payment, including credit cards, debit cards and ACH payments. Merchant accounts are contracts between a retailer and a credit card processing company. They allow you to offer your customers fast, flexible and secure options when making payments.

A credit card payment gateway is a crucial component to e-commerce. An online payment gateway works like a credit card machine in a sense: It allows your customers to submit payment information via the web and allows you to accept credit card payments online.

With a payment gateway, the online transaction occurs through a secure hosted payment form on your website or through an integrated shopping cart. Once the customer submits his or her order, the encrypted payment goes to the payment gateway, then to the payment processor, and through the credit card network and to the customer’s credit card issuer for authorization. 

Advantages to Merchant Accounts vs. Payment Gateways

Merchant accounts have been around since the advent of credit cards. They are a good choice for a retailer that sells primarily from a brick and mortar store. Setting up a merchant can help you increase cash flow and remain competitive in a challenging market.

Payment gateways are ideal for e-commerce and mobile retailers. By using a payment gateway, retailers can easily and securely enter and authorize credit and debit card payments from a cell phone or mobile device. To the customer, such transactions look just like similar transactions in a store.

Which One is Right for My Business?

Maybe you’re a small business owner looking to finally sell to your customers online.  Or maybe you’re a mobile business that needs an on-the-go credit card processing solution. You might even be a large enterprise looking to streamline the payment process. How do you know whether you need a merchant account, a payment gateway, or both.

 

When you call BluePay, one of our merchant account specialists will walk you through the steps required to set up a BluePay merchant account. Most new merchant accounts are up and running within 48 hours. We can also help you determine if a payment gateway is right for you. Get started today!

BluePay Processing, LLC is a registered ISO of Wells Fargo Bank, N.A., Walnut Creek, CA, U.S.A.
BluePay Canada ULC, is a Registered ISO/MSP of Peoples Trust Company, Vancouver, Canada.