What’s The Difference Between A Merchant Account & An Internet Payment Gateway?
- Posted by admin on April 24th, 2008 filed in Business, Definitions, Merchant Accounts, Payment Gateways
A merchant account and an internet payment gateway may seem similar, but there are actually a lot of major differences. The first difference is in cost and set up. Not all merchant accounts charge a set up fee, but there is always a hefty set up fee for an internet payment gateway. This is because you have to have the software to enable you to accept and process the real time payments. Merchant accounts also do not often have a monthly fee unless you do not meet their minimums, while an internet payment gateway will have a minimal monthly fee.
You may be thinking that a merchant account is cheaper, but in the long run it is actually more expensive. The payment gateway services typically only charge a small set rate per transaction, where the merchant accounts usually charge upwards of three percent per transaction. Additionally, a gateway allows you to process checks as well as credit cards. Finally, the gateway will allow you to process payments and orders in real time, and have the results sent to you and displayed to the customer. This is not offered by most merchant accounts, although some merchant accounts are now offering payment gateways as a part of their service. Still, why pay for both when you can get the gateway alone?
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