In fact, the two serve totally different functions: a payment gateway facilitates online transactions and allows you to process them, while a merchant account is a holding account where those payments first land before being deposited into your regular bank account.
Why do we need a payment gateway and merchant account?
- Once the payment is verified, funds are passed on to your business bank account. Meanwhile, a payment gateway is the link that makes the connection between a customer’s bank and your merchant account, allowing funds to flow into the latter after a payment transaction is cleared.
How to set up a merchant account?
- Choose a card brand or brands that you prefer. ...
- Check the rates and fees and compare them across other similar providers.
- If you plan to service international customers,then confirm that your merchant account will permit sales in all of the countries where your customers may be.
How to open your new merchant account?
- Business start date
- Contact information
- Authorized signer information (the person who is authorized to withdraw or spend money from the account)
- Bank account and routing numbers
- Tax ID
- Estimated processing volume in dollars
When is AVS fee charged on merchant account?
- You may be charged the AVS fee more frequently than the actual number of sales transactions. In fact, I recently audited a merchant’s statement where the AVS fee was being charged on both the authorization (when the sale is approved) and on the capture (when the funds are made available for the merchant to settle and get paid).