One of the most confusing credit card processing concepts for online merchants is the difference between the "payment gateway account" (the online card processor) and "internet merchant accounts". Though these are two seperate components of credit card processing, they are both necessary and work together to handle payments automatically.
Commercially available shopping carts will typically have configuration settings allowing a number of gateway choices. An internet merchant will usually want to select the shopping cart and web site hosting company and then order their merchant account based on the gateways that are available in the shopping cart.
Find out what gateways your shopping cart integrates with and ask your prospective Merchant Account provider if they are compatible. The popular Merchant Account Providers allow multiple gateway options and can integrate with most carts. They may also be able to bundle the gateway account into their package. This could save money and confusion in setting them up to work together.
If you are asking "which merchant account provider is right for me?" See our merchant account recommendations page HERE
The following information diagrams the typical payment process from the time the order is placed in the shopping cart to the funds being deposited in the merchant's bank account.
Internet Merchant Accounts
are seperate bank accounts for the merchant that are approved and capable of receiving credit card payments from credit card providers. Internet merchant accounts
typically do not hold funds for an extended period of time such as your typical bank account but usually transfer payments to another bank account designated by the internet merchant on a daily basis.
The Payment Gateway Account
is the online credit card processor
or transaction handler
which is capable of hooking into credit card accounts belonging to the online shopper and the merchant's internet merchant account (above). The payment gateway
handles the verification and transfer requests. The term account
when used with "payment gateway" is not a funds holding account but rather a "service account" that typically has a log in where you can configure your payment gateway settings.
Alternative Payment Methods
include person to person
payment services such as PayPal
. Click here
for more information on PayPal type of services.