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How Payment Gateways and Merchant Accounts Work

Electronic payment systems have become an irreplaceable part of any ecommerce business. It is evident that without credit cards and electronic wallets, international money transfer and online payment processing would be impossible to handle. By now electronic payment systems range in a plenty of services that operate as a connector between a customer and service.

Nowadays thousands of people whose business is somehow related to the global web have clear understanding of what a notion “online merchant account” means. However, not everyone realizes how exactly the process of financial data processing is being implemented. To begin with, any online merchant account employs the technology to process an online payment from the account to the acquiring bank and is commonly referred to as a payment gateway. A merchant account and a payment gateway can function separately, being provided by independent services or providers. It should be mentioned that online payment processing can be carried out with credit cards, mainly certified by MasterCard or Visa, electronic wallets and other payment platforms. Authorize.net and PayPal are good examples of payment gateway providers that transfer online payments to the acquiring parties and compatible merchant accounts. As it has been already mentioned, an online merchant account and a payment gateway rarely belong to a single service, since it isn’t cost-effective and reasonable enough. Nevertheless, when a billing company specializes in both services provided under one roof, the price of services can vary from that offered by a payment gateway and merchant account provider separately. In most cases, integrated payment services require purchasing or renting of special equipment. There’s also a common disbelief that most shopping cart can operate as sophisticated payment gateways. In fact, they do. But in most cases shopping carts serve solely as an application that facilitates choosing a product item for the final checkout. During online payment processing the relevant financial information is transferred between a shopping cart and a merchant account with the help of an online payment gateway, not a shopping cart itself. Similarly, an online merchant account store funds for a certain period of time unless they’re transacted by an internet merchant.

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Nowadays thousands of people whose business is somehow related to the global web have clear understanding of what a notion “online merchant account” means. being implemented. To begin with, any online merchant account employs the technology to process an online payment from the account to the acquiring bank and is commonly referred to as a payment gateway. A merchant account and a payment gateway can function separately, being provided by independent services or providers. It should be mentioned that online payment processing can be carried out with credit cards, mainly certified by MasterCard or Visa, electronic wallets and other payment platforms.



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