Merchant Account vs Payment Gateway

To sale any product online you need to have a payment gateway and merchant account as well. Most of the vendors know about both the account but they don’t know the difference between them. Here we are trying to portrait the picture of Payment Gateway as well as Merchant Account.

Payment Gateway:

A payment gateway is a service that helps you to process the credit card, debit card and online payment transaction for you. When a customer purchase anything online from the e-commerce website, they have to fill the required field to make online payment that includes card number, expiration date, name of the card holder and CVV number during the process. The E-commerce website sends that information to the payment gateway through computer to seek the authorization to process the payment. Then the payment gateway match the card and account information with the bank and if the card information matches with the authorized bank information then the payment gateway approve the payment against the credit, debit card and money gets transfer into your bank account which is known as the merchant account.

Merchant Account:

Merchant account and payment gateway both work together but the merchant account is more critical than the payment gateway. Merchant account is a kind of online bank account which actually held the money for you for some time before its get transfer to your online bank account. Once the sale is made successfully the money gets transfer into your merchant account and its stay there for some days, generally the minimum period is 2 days whereas the maximum is 7 days. Once the payment gateway process is done, the payment will be transferred into your bank account which is linked to your payment gateway and merchant account.

Aggregate and Dedicated Merchant Account:

Merchant account is segregated into two accounts, aggregated account and dedicated account. The dedicated account is assigned to one merchant where merchant has the full access of the account. If merchant want to have their own prices and want to apply the any discount then merchant can do that easily. If there is any account setup with the payment gateway then the dedicated merchant account is being assigned to the vendor.

The dedicated merchant account allowed having more controls and the negotiating power with the customer at their bargaining rates. For a dedicated merchant account the company will have to go under through a process. This takes some to get it approved by the bank.

Aggregate merchant account is one of the accounts which are being shared by more than one merchant and the money gets dropped in one place for all of the merchants. The merchant still have to go through under a process where the merchant has to provide the required information for his organization however, to get it certified the process is less complex and it’s faster. The merchant still have the control over the account but the access level is less in comparison to dedicated merchant account.

The dedicated merchant account holds the payment for minimum two days and after two days the money gets transfer into your account. On the other side the aggregate merchants account takes more than that time to transfer the money into your account.

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