Payment Gateways vs Merchant Account - Get Clear...And Set Up RIGHT! @TenTonOnline

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Transcription:

payment gateway vs merchant account

Being able to accept credit card payments is the crux of every online business, right? If you can't accept payments online, you won't have much of an online business! Now in order to accept credit card payments on your website, you'll need two things:

A payment processor and a merchant account. Now admittedly, this stuff can get a bit confusing. Lots of people use terms like payment gateway, merchant account, and payment processor interchangeably, which causes even more confusion. So let's simplify things and get clear on this stuff.

First a payment gateway, which is also sometimes called a "payment processor" is simply the mechanism that allows an online payment transaction to take place. So obviously, this is where data encryption and security comes in.

Here, the sensitive payment information that your visitor submits has to be protected. The good news is, this isn't difficult or complex to set up -- while it may seem complicated to you...know that thousands and thousands of websites have come before you...and protecting payment information online is very well established.

For you, it's simply going to be a matter of going through an easy setup process. Now, there are many world-class payment gateways or payment processor services to choose from that are well-established, highly secure, and very reputable.

Authorize.net and PayPal are two that come to mind. Now, in addition to accepting payments online, your payment processor handles another important task: Depositing the funds from your online sales -- that money's gotta go somewhere, right?!

And where those funds from your sales are transferred to is what's called a merchant account. This is sometimes called an "acquiring account." And this really isn't complicated at all -- you know what an merchant account is?

It's a bank account -- that's it! So when a customer purchases and their transaction is approved by your payment processor, those funds are then transferred from your customer's method of payment to your merchant account.

Payment gateways like Authorize.Net link directly to your business bank account at Bank Of America or WellsFargo or wherever. Other payment gateways like PayPal combine processing online payments and a bank account into a single service...

...so if you have a PayPal account, then you already have a merchant account. And as you know, you can transfer funds into and out of your PayPal account easily. That's really all there is to it!

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