Options for Merchant Accounts and Payment Gateways

There are myriad options for both merchant accounts and payment gateways, though they can vary greatly.

A payment gateway is the online equivalent of a point-of-sale system (like a credit card machine) in a brick-and-mortar store. When an online shopper selects “Pay Now” on a website, their payment information is passed through your secure server to a gateway, which serves as a liaison between your bank and the customer’s bank.

The details of the transaction are then sent from the payment system to your account. Your merchant account bank requests authorization from the customer’s issuing bank to complete the payment. The issuing bank then will either authorize or reject the payment and send the details of the authorization through the payment gateway to your website and the customer.

Hybrid Solutions

There are a handful of services that offer hybrid solutions that combine a payment gateway and merchant account into an all-in-one service. The advantage of doing so is the entire process to authorize a transaction takes just a few seconds; however, the cost of using such a solution is often slightly higher than if you were to obtain a payment gateway and merchant account separately.

What to Look For

Whether you opt for a hybrid solution or a separate account and gateway, you should always research prospective options to find one that fits your needs. No matter what you choose, here are a few key features to look for:
Account Management
Compatibility with your shopping cart
Encryption capabilities
Fraud prevention and security features
Hidden fees and payments
Reporting features
Startup costs