There is a number of things that need to set up when we talk about the E-commerce business. Among all online merchant accounts and payment gateway. But there are many misconceptions related to these terms. Some think that both are the same and many say only one of them is needed to run the online business.

These two serve all different functions. A payment gateway encourages online exchanges and permits you to deal with them. On the other side, a merchant account is a bank account that holds payments first. After the transaction gets approved, the amount is transferred into your main bank account.

To handle payments, you need both a merchant account and a payment gateway. If you still are not clear about these two terms, then go through this blog and understand the concept of these two.

What is a payment gateway?

Payment gateways are to allow secure transactions online and receive bank approval. To secure the transaction, the payment gateway sends the credit card information from the website.

It blends into your online shop. Usually, it offers you one or more methods of accepting online card payments.

Payment information for customer purchases is securely registered. The dealer sends details of the buyer via the resources offered by the gateway to the payment gateway. The gateway encrypts payment information during transmission to provide these details carefully.

This information gets transferred to a payment processor or purchasing bank. At this point, the acquisition bank takes over. The bank can screen for fraud and then pass the transaction to card networks.

It sends a message of acceptance or rejection to the trader. A merchant may either refer the shopper to a confirmation page or request. That it has a different type of payment based on approval or rejection.

Salient features of Payment Gateway

• Fraud protection services
• Multiple payment methods
• Recurring billing tools
• Detailed payment analytic

What is an Online merchant account?

An online business account allows traders to manage credit and credit online. You can store the assets on your Mastercard in your payment portal. The fund transferred from your merchant account

A merchant account is a 2D payment gateway processing account for retailers. You deposit the funds from your sales there, or some organization that sets up the account for you. The funds are automatically transferred from the merchant account to your corporate bank account.

Accounts that are for yourself under the specified schedule as set by your payment gateway.

Over and above the essential: what differentiates those merchant accounts?

Three key elements separate commercial accounts:

Some promote global business

Some trading accounts can receive the only USD in money. While an international payment gateway provider can set up one to accept multiple currencies. So it is a smart idea to create a multi-departmental merchant account if you are going to expand globally (and should be!).

Some are underwriting more sophisticated.

Not all traders have the same risk for their transactions. That must be taken into account during the underwriting process. A tailored process of underwriting leads to fewer issues down the way. It helps prevent the account from being shut down unforeseen by miscalculations.

Some are accounts that are shared or aggregated.

Some eCommerce traders are shared among all payment gateway traders. This ensures that the risk profile is mixed with all other traders on the pool. This can be of benefit not for others but certain merchants. Check if you have a dedicated or aggregated account.

Before you sign up for a provider to see if this will impact your online business.

Why can’t the sales money directly get deposited in your bank?

Since the goods can get a return request. There is always a possibility of chargeback with the amount you receive as a seller. The chargeback amount is deducted from the merchant’s bank account. The remaining amount is transferred to your bank account.

You can collect from various sources on your payment portal. Your payment gateway might be collecting stores from many sources. It collects the amount in your merchant account. And joins them into one single store for your merchant account, makes compromise simpler.

Favorable features of merchant accounts and payment gateways

The merchant account is to empower organizations to acknowledge credit card payment and other modes. Setting up a merchant account can support you:

• Improve income

• Boost sales volume

• Remarkable presence in the global market

A conventional payment gateway is ideal for eCommerce and versatile merchants. Merchants can use numerous channel to give a frictionless buying experience:

• Coordinated payments inside bookkeeping, CRM, or ERP programming

• Card-present transactions at a retail location framework

• Contactless payments tapped or waved over a close to handling correspondence (NFC) device.

which choice is directly for your business?

We are familiar with the term online merchant account. Merchants that sell from the physical stores, can set up a merchant account. It will assist you with expanding your business revenue.

Talking about the payment gateway, they are beneficial for e-commerce businesses. Payment gateways secure the transactions and the card details of customers. 

I Hope, now you have understood the basic difference between the merchant account and payment gateway. Merchant accounts and payment gateway have their importance and role in a business. If you are looking for payment solutions and merchant account services for your business, you can contact Amald.