Thursday, 05 Aug, 2021
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E-commerce has become an essential component of the global retail framework in recent years. The retail landscape, like many other industries, has undergone significant transformation since the advent of the internet, and thanks to the ongoing digitalization of modern life, consumers from virtually every country now benefit from the advantages of online transactions.
Due to the rise of online transactions nowadays, the payment gateway providers and the merchant accounts have grown in popularity as a result of the Internet's rapid expansion, to meet the customer’s demands. They are in charge of a payment's security, sensitive transaction data, and processing it into a virtual station or an E-commerce website.
So, what is the difference between a merchant account and a payment gateway ?
A merchant account is a type of business bank account that allows a company to accept and process credit card payments. Merchant accounts necessitate a partnership between a business and a merchant acquiring bank, which facilitates all communications in an electronic payment transaction.
A merchant account is a bank account that is specifically set up for business purposes and allows companies to make and accept payments.
Merchant accounts, for example, enable a company to accept credit cards or other forms of electronic payment.
Merchant account services frequently come with additional fees, but they also provide a variety of services.
What is the merchant account and payment gateway?
When it comes to the operation of an online payment gateway, it always follows a procedure for settling the payment. This occurs when a customer orders a service or product from a merchant who accepts payments through a payment gateway. The payment gateway goes through a number of steps, beginning with entering the card details and ending with payment flowing into the merchant's account and settling.
The payment gateway serves as a middleman between the customer and the merchant, ensuring that the transaction is completed securely and quickly. Merchants may find it easier to integrate the necessary software with the help of an online payment gateway. As a middleman during payment processing, the gateway manages the customer's sensitive card details between the acquirer and the merchant.
When customers make a purchase, the funds must first be authorized and processed before they can be deposited into the merchant's account.
A few safeguards are in place to protect merchants from card fraud and to ensure that the consumer has the funds to pay for merchants. The money is paid directly to the merchant account after their customers' card payments are checked following the transaction.
Most merchants rely heavily on merchant accounts to run their businesses. When it comes to selecting a merchant account service provider, merchants have a number of options, with transaction costs playing an important role. Merchant acquiring banks, which work with merchants to facilitate electronic payments, provide merchant accounts.
If a brick and mortar business chooses not to accept electronic payments and only accepts cash, they do not need to open a merchant account and can instead rely on a basic deposit account at any bank. However, because electronic payments are the only option for online businesses, they must establish merchant account partnerships as part of their business operations.
What are the payment gateway and merchant account?
There are some erroneous conceptions commonly about the difference between payment gateway and merchant account, the business only requires one or the other. Actually, they serve 2 specific different functions: while the payment gateway brings a desired condition for online transactions and allows merchants to process them, the merchant account is a holding account which those payments first being sent to before being deposited into the regular bank account.
Here’s some key simples about the difference between payment gateway and merchant account.
What is the difference between a merchant account and payment gateway?
A merchant account is a holding account where the payment transaction’s information is collected , here is where the funds are held. Funds will be sent to the merchant business bank account, once the payment is verified.
On the other hand, the payment gateway is the platform that links between the merchant account and the shopper's bank. It allows funds to flow into the latter one after the payment transaction is verified.
The next point is figuring out how to choose the right merchant account and the right payment gateway for the demands.
When it comes to merchant accounts, there are 2 main options: a payment service provider (PSP) merchant account and an independent sales organization (ISO) merchant account.
A PSP account is set up quickly and easily, it is used especially by small and medium-sized businesses. About an ISO account, it is used by large-sized businesses and set up complexly. But it usually offers lower transaction fees. Depending on some specific characteristics of your business, one merchant account may be the best fit for the business than the other. Choosing the right payment gateway is also a thing. Besides that, there are other factors such as processing fees, security and support - which is different, compared to the payment gateway, to the next one.
The purpose that comes first when talking about the difference between payment gateway and merchant account.
What are the advantages of a payment gateway and a merchant account?
Paying for goods and services online isn't limited to credit and debit cards. Because many customers choose to pay with eWallets, direct debit, or bank transfers (especially if you're selling internationally), you'll need more than simply a credit card payment gateway.
Every time an online business accepts a payment, it puts itself at danger of being hacked. Your business will suffer as a result of chargeback fees and fines, lost merchandise, and reputational damage if your fraud level spirals out of control. Finding a payment gateway with powerful fraud detection and prevention technologies will assist you.
Many organizations now sell things via a subscription basis. Finding a payment gateway that can handle automated billing, issue payment reminders, set up flexible billing plans, and automatically update shoppers' subscription payment details will make your life easier.
To accept credit or debit card payments through a merchant's website, merchants will need both payment gateway and merchant account: a payment gateway (to accept payment details and connect to payment networks) and a merchant account (to receive the funds). However, some services effectively combine these two elements:
Some payment gateway services function as both a payment gateway and a merchant account, eliminating the need for a separate merchant account.
Other providers sell payment gateways and merchant accounts separately. Merchants can obtain them from the same or different providers (e.g. a SagePay gateway and a First Data merchant account). Merchants can integrate payment gateway to any other merchant account from their preferred banks. This helps merchants manage their funds easier with the suitable business banking account.
Based on the difference of fee charge of every payment gateway provider, at PayCEC, we provide 2 pricing packages:
Overseas representative offices and international subsidiaries are available to experienced merchants looking to massively expand up their company.
All in one solution for your business needs.
The fee charges will be changed from time to time, includes:
Read more: Payment gateway fees
One of the difference between merchant account and payment gateway is the fee charged. The fees associated with a merchant account differ depending on the service provider. In some circumstances, merchant accounts have a set per-transaction rate that is free of additional charges. Others employ an interchange-plus pricing model, which combines the processing cost from the credit card issuer with a markup from the merchant account provider. Finally, there's the tiered pricing approach, which gives a variety of fees depending on the transaction.
Furthermore, at PayCEC, when you register for a merchant account, there are several benefits, such as:
PayCEC was established in response to the growing need of businesses to accept online payments more quickly and easily. In the new media era, our payment flow has evolved to work seamlessly and effectively across all platforms and devices. We pride ourselves on combining superior technology with first-class customer service.
PayCEC is a truly global payments platform that not only allows customers to get paid but also withdraws funds to their Business accounts in various currencies.
We have created an open and secure payments ecosystem that people and businesses choose to securely transact with each other online and on mobile devices.
We are honored to serve as your reliable business partner and financial service provider in the industry and other business-related services. With the help of our professional staff, to help merchants to achieve their goals for the development and expansion of the international business market.
Our payment flow has developed in the e-commerce world to perform seamlessly and effectively across all platforms and devices. We take pleasure in combining technology with customer service, to solve your concerns at the moment.
PayCEC is a fully worldwide payment network that not only allows merchants to be paid immediately and securely, but also allows them to withdraw money in multiple currencies to their company accounts.