What is the difference between Merchant Account and Payment Gateway?

Siddharth_SSiddharth_S Posts: 2subscriber Member
How are merchant services different from a payment gateway? How do they enable running a business?


  • Ryan O'BlenessRyan O'Bleness Birmingham, Mich. Posts: 957administrator Site Admin

    I believe payment gateways are used for facilitating online transactions and helping them get approved and flowing through the payment funnel. Merchant accounts are for collecting the funds sent to the merchant on successful sales and are paid out to the merchant. 

    I am certainly not an expert on this, but this article from 2016 seems to explain it well. 


    If you're interested in merchant services, definitely check out our partner, International Bancard: https://startupnation.com/internationalbancard/

    Ryan O'Bleness
    Community Manager
    StartupNation, LLC
  • Chris262Chris262 Posts: 10subscriber Bronze Level Member
    With a payment gateway, the online transaction occurs through a secure hosted payment form on your website or through an integrated shopping cart. Once the customer submits his or her order, the encrypted payment goes to the payment gateway, then to the payment processor, and through the credit card network and to the customer’s credit card issuer for authorization, popular payment gateways are stripe, g2a pay etc
  • MeCkoMeCko Posts: 11subscriber Bronze Level Member
    Hello there.

    A merchant account is an agreement between a merchant and an acquiring bank that allows the former receive and process credit card payments. Getting a merchant account is essential for all those willing to reach out to a broader audience. More and more people are willing to pay for goods and services not with cash but with credit cards – and that’s why a merchant account is a must!
    When you have a merchant account - you need to choose a payment provider. It is a company that provides money processing within a merchant, cardholder, acquiring a bank, a payment gateway, and an issuing bank.
    To provide such solutions payment providers use special software, called payment gateway. This software serves as an interface between the payment form on your website and an acquiring bank
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