What is a Payment Gateway?
A payment gateway is an e-commerce application service provider that authorizes payments between a merchant and the customer, typically for e-businesses, online retailers or traditional brick and mortar stores.
Payment gateways secure credit card transactions by encrypting sensitive information, such as credit card numbers, to ensure that information passes securely between the customer and the merchant. Payment gateways also manage the complex routing of sensitive customer information through the credit card processing networks.
To add a payment gateway to your website, you will need to sign up for a merchant account with a bank or other financial institution. Once you have obtained a merchant account, you will need to obtain a payment gateway from a payment gateway provider. You can either integrate the payment gateway into your website yourself, or you can use a third-party service provider.
Most payment gateways providers will charge you a monthly fee, and you will also be required to pay transaction fees. When choosing a payment gateway provider, it is important to compare the fees charged by different providers.
Some popular payment gateway providers include:
- PayPal
- Google Checkout
- Authorize.net
- 2Checkout.com
- WorldPay
What is a Merchant Account?
A merchant account is a type of bank account that allows businesses to accept credit card and electronic payments. Merchant accounts are established with a bank or other financial institution, and they allow businesses to process credit card transactions in-store, online, or over the phone.
To set up a merchant account, you will need to provide the bank or financial institution with some basic information about your business, such as your business name, contact information, and tax identification number. You will also need to provide the bank with your credit history and financial statements.
Once your merchant account is set up, you will be able to accept credit card payments from customers. You will typically be charged a monthly fee for your merchant account, as well as a per-transaction fee. When choosing a merchant account provider, it is important to compare the fees charged by different providers.
Some popular merchant account providers include:
- Bank of America Merchant Services
- Chase Paymentech
- First Data Corporation
- Paymentech Solutions
- Wells Fargo Merchant Services
What is a Credit Card Processor?
A credit card processor is a company that manages the credit card transactions of a business. Credit card processors handle the authorization, settlement, and funding of credit card transactions.
When a customer makes a purchase using a credit card, the credit card processor will authorize the transaction and send the funds to the merchant’s bank account. The credit card processor will also charge the merchant a per-transaction fee.
To use a credit card processor, you will need to set up a merchant account with a bank or other financial institution. Once you have obtained a merchant account, you will need to obtain a credit card processor from a credit card processing company. You can either integrate the credit card processor into your website yourself, or you can use a third-party service provider.
Most credit card processors will charge you a monthly fee, and you will also be required to pay transaction fees. When choosing a credit card processor, it is important to compare the fees charged by different providers.
