Payment Gateway vs Merchant Account: What’s the Difference? – Part 2

In the first part of this article, we have discussed what merchant accounts and payment gateways are and their differences. Now, your reliable accountant for eCommerce businesses is going to cover what the differences are between payment gateways and payment processors:


What Is a Payment Processor?


Payment processors are an intermediary to facilitate transactions for merchants. They typically handle credit card and echeck processing, payment gateways, and other payment processing needs for their customers. Unlike payment gateways, payment processors offer a variety of services such as recurring billing, credit card fraud processing, and reporting.


How Does a Payment Processor Differ from a Payment Gateway?


A payment gateway is an online business solution to allow customers to make online payments using a secure transaction payment system. It allows the customer to submit the card information securely and then sends the data to the processor where the customer’s bank information is verified. The processor then sends the data to the company’s bank to make the final transaction.


A payment processor is an online business solution to allow merchants to accept and process electronic payments across different networks, devices, and applications. It is typically a complete payment solution that provides a multitude of services such as account management, reporting, PCI compliance, fraud prevention and more.


While both a payment gateway and payment processor facilitate credit card use, a payment processor provides much more than the gateway does.


Which Is Better for Your Business?


If you’re a small business owner, you’re likely using a payment gateway due to the efficiency and ease of use. They make it easy for you to accept payments through your website and enable you to use online shopping carts and shopping baskets to process orders.


If you’re a larger business, a payment processor may be more beneficial for your business. A payment processor is going to offer you a wider range of services and the different plans may fit your business needs better.


How to Choose the Right Merchant Bank Account Provider


The key to making your company’s payment processing experience more efficient is to choose the right merchant account provider. To find out which provider is right for you, examine each provider’s payment gateways and payment processor’s features, how they are priced, their customer service and more. Compare each one to see which is the best fit for your business.


How to Choose a Payment Gateway Provider


To find the right payment gateway for your business, ensure that it has the features you need. You should also think about its security and other features. And then compare the cost of the gateway with other providers.


By comparing the payment gateways to payment processors, you can easily choose the one that fits your company’s needs. If you are choosing a payment gateway, make sure that you choose one that you can use for all your payment transactions.


Conclusion


As the popularity of e-commerce increases, more businesses start accepting credit and debit card payments online. Online businesses need a secure payment system to secure the sensitive customer data, provide excellent customer service and offer sales that convert in order to make a profit.


While a payment gateway is a great way to process credit card payments, a payment processor can offer more value. The processor can offer more features, services, and may be more dependable than a gateway. The key is to choose the one that suits your business needs. An accountant for online businesses can help you with that.


The ECommerce Accountant is among the best accountants for online businesses in Australia. Book a free strategy session with our experts today!

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