What is the difference between a merchant account and a payment gateway?

A merchant account simply allows you to accept credit card payments and a payment gateway authenticates and authorizes individual credit card transactions.

Both are necessary if you’re setting up an online store and want to accept credit card payments. Some merchant accounts include the payment gateway, but most don’t.

A merchant account allows you to take card payments. Some online processing services require you to have a merchant account to put card transactions through.

However the 3rd party payment gateway typically acts as a “middle man” removing the need for you to have your own merchant account to process transactions.

There are a number of distinct advantages to using gateway services particulalry when it comes to lower volume transactions. These are things such as reduced cost of implementation, security and PCI can be negated.

Basically, both allow you to accept credit cards as payment, however the payment gateway allows you to view individual charges online (usually payment gateways are suitable for ecommerce businesses).

Usually, a merchant account includes a payment gateway. If you sign up you should find one that includes the gateway. Check out this site for more info. or as an example: