What is a major difference between a merchant account and a payment gateway?
Giving preference to accept online payment can give an extended hand to grow into business. However, setting up everything, might a little confusing task. Especially if you are launching your first online e-commerce store. But don’t worry, we have designed our system so easy and simple integration process of payment gateway to your website.
You must also have to do research at own on this matter, you may have heard about the terms such as merchant account and payment gateway. Since these are the main cornerstone of any online payment system. Please see below the details and brief about these terms.
What is exactly Payment Gateway and Merchant Account?
Payment Gateway is an online application that provides a connection between the financial network and the Internet. When a customer initiates for credit card payment online from a website or e-commerce, it is the payment gateway act that forward that information off to the internet and into the banking system. The Payment Gateway is the first part for the payment Ecosystem, which transmits the payment information to the merchant account. The other end is Merchant account of the Payment Ecosystem, and it’s were the funds end up after the approval. If the customer or issuing bank has stopped then the transaction might get decline. After the settlement period, the funds are then transferred from the merchant account to your normal business account. The both Payment Gateway and Merchant Account are necessary for accepting and credit card payment processing.
How does the Payment Gateway works?
Through a Payment Gateway, you can process payments through a variety of channels, including Debit Card, Credit Card. The Gateway also must ensure that all the payment information is encrypted and secure to avoid any fraudulent activity as it is being transferred to the payment processor. From the customer’s point of view, access to the payment gateway can take the form like a hosted page, An API or an Integrated Shopping Cart. The gateway will remain invisible to the customer.
As soon as the customer initiates for the payment procedure at a checkout page, the payment goes through the gateway directly to the payment processor, then rotates through the credit card network, before reaching the customer’s credit card issuer where it awaits authorization. If the payment gets authorized, the funds are transferred from the customer’s account to merchant account.
Also there are number of gateways to choose from, but it is most important to choose one that is PCI complaint. There are various PCI Standards, and complying with the highest standard ensures that your customers are fully protected and Payment processing is being done through a secure channel. A good standard would be atleast the PCI-DSS Level 1, in order to ensure that no cardholder data is being used by another person or being exposed over internet or through any other medium. A good merchant account provider must take care for this for their merchants, so just keep search to choose a reputable merchant account provider.
How exactly a merchant account work?
When the sale is considered successful, money is being transferred into a merchant account. A merchant account is a kind of bank account that stores the money that has been paid by the customer/ card holder on the merchant’s website/ business. The best advantage of a merchant account is that it can accept many forms of payments including debit/ credit cards, wire, ACH and others. After a period generally known a settlement period, you can receive funds from a merchant account to your general bank account.
Now coming to the types, Basically there are two types of merchant account: dedicated and aggregated. Dedicated account belongs to your business only, and they tend to have better approval rates, because they are specifically tailored for your kind of business and sales volume. Although, Aggregate accounts are easier to get, but they are shared with other companies, which means that you will normally get the rate available to the least desirable business that is able to share aggregate account with you, which not be possibly the best rate your business could qualify for. Aggregate accounts are also not safe, because if there are more than one merchant is using this account anyone can do something illegal or improper, then it is also possible that entire aggregate account may be shut down for all the merchants using it
For detailed information about the merchant account and payment gateway, please contact on skype or go to “www.duspay.com”.
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