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  1. #1
    Join Date
    Sep 2008
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    Sydney Australia
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    580

    payment gateway vs merchant account

    Could someone please explain the difference between these? Do you need both or just one or the other as cdgcommerce say they act as a payment gateway and deposit the money into your merchant account. Can you use them with a normal bank account as i don't think i'd be making the $10,000 odd $$$ per month needed for a merchant account.

    Regards,
    Peter

  2. #2
    Join Date
    Sep 2006
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    Cardiff - United Kingdom
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    Roughly speaking; a payment gateway is simply where the buyer goes to the payment gateway's website to pay you (i.e. PayPal standard payments take you to PayPal.com to pay), whilst with a Merchant Account you can usually accept Credit Card payments via your website (and then you pass the CC details onto the mechant and they process them).

  3. #3
    Join Date
    Aug 2004
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    Orlando
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    You just need one, though a merchant account is good to have if you can afford it because it shows you are more established and builds trust with your customers.
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  4. #4
    I would check out PayLeap.

    They offer a payment gateway and a merchant account all in one package with very competitive rates.

    This simplifies the entire process cutting out the middle man and third-party resellers.

  5. #5
    I agree that one should be enough, but having more then one can also be better.

  6. #6
    Join Date
    Apr 2001
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    Paradise
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    You need both, the merchant account is provided by you Bank and as example, AuthorizeNet is a payment gateway, which makes the "connection" between your billing system to your merchant account.
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  7. #7
    Join Date
    Apr 2009
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    Tamilnadu, India.
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    Hi

    check this, you will get an idea..
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  8. #8
    Join Date
    Sep 2008
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    Sydney Australia
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    I'm thinking i'll just use paypal. seems a lot easier

  9. #9
    Join Date
    Apr 2009
    Location
    Dallas/FortWorth TX
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    Paypal is too heavy on cost though. You might get better rates and service from a reputated bank in your country.

  10. #10
    Join Date
    Feb 2002
    Location
    New York, NY
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    4,559
    Quote Originally Posted by smenkhare View Post
    Could someone please explain the difference between these?
    The payment gateway handles the transaction, and then the proceeds are put into a merchant account. You need both, but most payment gateways will help you set up the merchant account.

    A company like MerchantPlus makes the process fairly easy:
    http://www.merchantplus.com/
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  11. #11
    Join Date
    Sep 2008
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    Sydney Australia
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    580
    If for example I go with merchantplus, do my customers get redirected to their site or can they enter all their details on my site?

  12. #12
    Join Date
    Mar 2004
    Posts
    90
    Hello,

    As bqinternet stated a merchant account is needed to use a payment gateway. Think of a retail terminal in your local store. That terminal is really a gateway. A gateway really is just an interface between the customer and the merchants processor. Also from what I have seen with many customers is that once you reach about that 1k a month in sales it becomes more costly to use paypal than a merchant account and gateway. Please also note that there are many merchant account providers out there and they all have gateways they offer. Some gateway will cost you per month and per transaction, some do not. The biggest thing to check before you sign anything is "Does the gateway they offer work with my software".
    If it works, do not mess with it.
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  13. #13
    Paypal payment gateway that takes you directly to paypal.com where the buyer goes to the payment gateway's website to pay you, and with a Merchant Account you can usually accept Credit Card payments via your website, then you pass the Credit Card (CC) details onto the merchant and then they process them.

  14. #14
    Join Date
    Apr 2009
    Location
    Tamilnadu, India.
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    227
    Hi

    you want directly accept CC in your site? i think www.authorize.net will provide this..
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  15. #15
    If you do start start doing a decent amount of monthly sales, you should consider a merchant account because the fees are usually 1-3% less.

  16. #16
    Join Date
    Mar 2009
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    St. Louis, MO
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    Don't forget there is a cost factor of being PCI compliant if you process credit cards directly on your site.
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  17. #17
    How much is the fees for authorize.net ?

  18. #18
    Join Date
    Mar 2003
    Location
    Coxsackie, NY
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    190
    Quote Originally Posted by e[X]treme[Z] View Post
    How much is the fees for authorize.net ?
    This depends on the level of service you are receiving from them. I believe for just the gateway the normal price is $10/month.
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  19. #19
    Join Date
    Aug 2003
    Location
    Chesapeake, VA
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    Hi Peter,

    Regarding your initial question in the post here pertaining to CDGcommerce - you would NOT need to setup a separate Internet payment gateway with our service as both the merchant account and the payment gateway is included together.

    In addition, regarding your question on whether your bank account would be compatible - if it is a U.S. bank account then it would work just fine as all merchant funds are deposited via the ACH network used by all U.S. banks.
    CDGcommerce.com - Trusted Merchant Account Solutions since 1998
    Many thousands of successful, growing businesses benefit from our expertise every day. You can, too!
    We help merchants to eliminate gateway costs, reduce & mitigate fraud and achieve streamlined PCI compliance.
    Learn more today at http://www.cdgcommerce.com - we look forward to helping your business grow!

  20. #20
    Join Date
    Sep 2008
    Location
    Sydney Australia
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    580
    Quote Originally Posted by cdgcommerce View Post
    Hi Peter,
    In addition, regarding your question on whether your bank account would be compatible - if it is a U.S. bank account then it would work just fine as all merchant funds are deposited via the ACH network used by all U.S. banks.
    What about Australian banks? I don't suppose the FTA covers that? Banks here are masters of ripping off customers so I don't really want to fork out for one of their merchant accounts.

  21. #21
    Join Date
    Aug 2003
    Location
    Chesapeake, VA
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    3,377
    If you are asking specifically with respect to our service, we would not be able to work with an Australian bank account - only with U.S. bank accounts.
    CDGcommerce.com - Trusted Merchant Account Solutions since 1998
    Many thousands of successful, growing businesses benefit from our expertise every day. You can, too!
    We help merchants to eliminate gateway costs, reduce & mitigate fraud and achieve streamlined PCI compliance.
    Learn more today at http://www.cdgcommerce.com - we look forward to helping your business grow!

  22. #22
    Quote Originally Posted by e[X]treme[Z] View Post
    How much is the fees for authorize.net ?

    I set up both the gateway and merchant account for our company's shopping cart through Authorize.net and CyberSource. CyberSource is Authorize.net parent company and the actual company that handles Authorize.net's merchant account service.

    Our company does between 10K and 25K per month in online transactions and I would NOT recommend CyberSource Merchant Account Services to anyone! In over 5 years of business we have NEVER had a single charge back. Our average sales transaction is approx $1500 and CyberSource constantly freezes our funds for up to 180 days to conduct a "routine audit".

    Obviously, we're in the process of finding another merchant account.

    I have nothing bad to say about Authorize.net Gateway Account. But, stay away from Authorize.net merchant account parent company CyberSource. CyberSource business practices suck. And I choose to use the word suck when referring to CyberSource to make sure the term is indexed properly in Google.

    What's even more ironic is that our company is an approved Authorize.net/CyberSource reseller and now I wouldn't recommend them or resell their services to my worst enemy.

  23. #23
    Join Date
    Apr 2008
    Location
    Portland, ME
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    117
    In order to accept credit cards through the Internet, a payment gateway is critical to transport the credit card information from the shopping cart to the payment processor once the consumer clicks the "Buy" button. In most cases, this transaction happens almost instantaneously. The payment gateway receives encrypted transactions from the merchant's shopping cart. An encrypted transaction simply means that credit card numbers can't be read by people who are not supposed to read those numbers. authentication is then provided and the decrypted payment.

    Payment Gatesway Functionality

    Information is transmitted for authorization. The payment gateway:

    -Fulfills the same function as a point-of-sale (card swipe) terminal at a physical retail location.

    -Takes information provided through a shopping cart and transmits it electronically and securely to a payment processor to be routed for authorization of payment Payment Processor

    The payment processor transmits a customer's credit card information via the Internet to the merchant bank for authorization. It also sends data back to the merchant's bank to approve payment or the transfer of funds.

    Specifically, a payment processor:

    -Acts as a link from the merchant to the acquiring bank or merchant bank
    -Receives information from the merchant through the payment gateway and packages the information for delivery to the acquirer, ensuring that all necessary transactional data is present and valid
    -Later transmits information back from the acquirer for delivery to the merchant to settle the transaction

    With the shopping cart, payment gateway and payment processor in place, merchants have all they need to offer convenient e-commerce solutions that deliver superior security and service.

  24. #24
    Join Date
    Aug 2009
    Location
    International
    Posts
    102
    If you're just starting out and unsure of the business model then stay with something easy to manage and trusted such as PayPal.

    As your business grows (10k+/month) then start looking into alternatives

  25. #25
    Join Date
    Dec 2009
    Posts
    43
    Pay Pal is fine if your selling on e-bay or your doing under $1000 per month, but if you want to have a professional site, you have to have a merchant account. You lose customers when you only have a PayPal account because a lot of folks don't want to have to sign up with them and go through the extra steps(lower sales conversion rates), when they could just use their credit card directly. Its going to take you longer to grow your business to 10k per month if you don't take Credit cards directly.

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