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Power Sellers Unite
Bringing Buyers and Sellers Together
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kiberlain
Joined: 13 Mar 2009
Posts: 8
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| Posted: Thu Jun 04, 2009 8:09 am Post subject: The difference between merchant accounts & payment gatew |
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You will often hear the terms "payment gateway" or "ecommerce payment processing" and suchlike and it's important to draw the distinction between these, and merchant accounts.
Here's the primary difference.
The merchant account is the license, the service that allows you to process Visa, Mastercard and a range of other credit cards online.
However, in contrast, the payment gateway is, if you like, the technological vehicle that passes credit card information from merchant accounts to the banks for them to process the charges.
So in essence, you need both of them in order to process credit cards online. Some startups have been known to get these two mixed up, meaning they carefully apply for a payment gateway, but haven't got the merchant account to begin with.
You have two options. If you already have a merchant account for offline business, go back to the company that provided you with the merchant account service and request to be given an internet merchant account, then apply simply for a payment gateway lease online. Alternatively, most online merchant accounts come complete with payment gateway. |
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sam40
Joined: 08 Oct 2009
Posts: 4
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| Posted: Thu Oct 08, 2009 2:10 am Post subject: Re: The difference between merchant accounts & payment g |
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E-Commerce merchant accounts are acquired from either merchant banks or MSP (merchant service providers), as already stated above. The process of acquiring, or applying for, an e-Commerce merchant account is different and depends on the provider itself (terms, guidelines and conditions), the type of e-Commerce merchant account and the e-Commerce merchant.
A payment gateway can be called the relay between the e-Commerce merchant account affiliated website (online shop) and the merchant bank, which is also connected to a large network of credit card issuing banks. One of the other main functions of credit card processing payment gateways, besides communication, is encryption. |
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felix56
Joined: 26 Oct 2009
Posts: 1
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| Posted: Mon Oct 26, 2009 2:49 am Post subject: Re: The difference between merchant accounts & payment g |
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| Merchant account is a retailer's bank account that allows you to accept major credit cards, electronic checks, etc. On the other hand payment Gateway is a software for verification and authorization of different transactions involve in credit card processing. |
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fruity
Joined: 28 Jul 2006
Posts: 375
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| Posted: Tue Oct 27, 2009 10:25 pm Post subject: Re: The difference between merchant accounts & payment g |
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felix56 wrote (View Post): › docWrite("quote")Merchant account is a retailer's bank account that allows you to accept major credit cards, electronic checks, etc. On the other hand payment Gateway is a software for verification and authorization of different transactions involve in credit card processing.
What you refer to Gateway are you referring to a product or the service, the function of a gateway service? Because if you're talking about generally what a gateway does then you are incorrect. Gateways are dumb but secure systems, they perform the function of transferring data, that's it. its the merchant account that does the authorization and verification.
Now Paypal on the other hand, wants sellers to believe otherwise
and when you get into merchant accounts, you also get into serious play with credit reports and reserves. judging by the reserve comments from other sellers, me thinks they fell for it and upgraded their pp accounts not knowing they just signed their life away |
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merryscanlan
Joined: 24 Feb 2012
Posts: 7
Location: United Kingdom
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| Posted: Mon Mar 26, 2012 2:47 am Post subject: Re: The difference between merchant accounts & payment g |
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| Payment Gateway is a one type of software which actually processes customer order information, address, credit card number, etc. whilst Merchant account is a bank authorized account which allows you to accept major credit cards, electronic checks, etc. With a payment gateway, the order and credit card information is directly sent to your merchant account. |
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thegolfingdolphin
Joined: 13 Jan 2009
Posts: 695
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| Posted: Mon Mar 26, 2012 3:12 pm Post subject: Re: The difference between merchant accounts & payment g |
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| Before you apply for a payment gateway, check with the shopping cart you use to see which one's they work with. They are not all compatible with each other. |
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SebastianBermud
Joined: 18 Apr 2012
Posts: 2
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| Posted: Fri May 18, 2012 3:52 pm Post subject: |
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Merchant account is a bank authorized account which allows you to accept major credit cards, electronic checks, etc. Note though that rates banks will charge you are higher if you are operating an online store because the "card is not present"
Payment Gateway is a software which actually processes customer order information, address, credit card number, etc. The data is sent to a credit card authorization network which verifies that the credit card is valid and verifies that the shipping address matches the billing address. Example of payment gateway is NextPay.com |
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