online shopping website on laptop easy e commerce website shop by laptop 195723616

Merchant Account, Payment Gateway, or Both?

July 13, 2021

You’ll need a merchant account and a payment gateway when accepting credit cards at your business. But some groups will provide both of them for your use.

You will always require a merchant account, but there’s a question over whether you should get a payment gateway to go with your account. The gateway could also include something your merchant account provider also offers.

The two options are helpful for being secure and for helping you manage your payments. But the option you should choose can vary over how you run your business.

The Three Types of Gateways

The best consideration for a payment gateway is to review the three most prominent types of gateways:

·         Many gateways are provided by merchant account teams. These gateways are among the most convenient ones for people to utilize.

·         Dedicated merchant accounts are also available for use through some gateways. This is the other way around from the first option, as the gateway provider offers the merchant account.

·         Some gateway providers don’t offer merchant accounts. You’ll have to acquire an account from your bank if you want to accept payments with one of those gateways.

Combining the Two Services

You’ll utilize many services when you work with a merchant account and a payment gateway. A payment gateway will help you store card data, produce a checkout page, and support recurring payments.

A merchant service account gives you access to a POS setup and can offer fraud detection services. Many accounts will also help you find a suitable merchant category code to help you receive the most accurate billing data for your work. You could qualify for multiple codes depending on who you contact and what you qualify for using.

Both solutions combined will provide support for multiple payment options. You’ll also ensure the security of all your transactions when handling your work.

Safety First

Safety is critical when finding a payment solution. A merchant service team can help you identify fraud and also maintain PCI compliance. But you’ll have an easier time getting there when you hire a payment gateway to support your business. A gateway can add additional fraud protection features, including some customizable solutions.

Tokenization is also available through some gateways. Tokenization is an advancement over traditional encryption, as it entails replacing sensitive data bits with a token that represents the data in question. The effort keeps you from having to store as much data on people as you may expect.

Safety is especially critical if you accept mostly online payments. A gateway will require extensive safety features to keep your business secure. But the gateway can also work for in-person merchants who want a system that can help review card transactions, especially as some behaviors customers exhibit might be unusual or could be signs of fraud if someone finds a way to acquire a card.

What About the Fees?

The service fees will vary surrounding whoever you contact for help. A merchant service provider will charge various rates for whatever payment cards you accept. You may also experience some monthly fees and other costs surrounding your work. Some providers will charge for services each month, while others might force you into lengthy contracts.

Gateways are often similar, as they can charge monthly fees and might even put you into a contract. They can also include variable rates for all payment methods.

The fees a merchant service provider charges are often more influential to what you’ll spend. Your merchant provider will offer a unique rate for services surrounding your business’ operations.

Regardless of what happens, you’ll experience interchange rates dictated by the credit card networks. You cannot control those rates, as credit card companies make them for all businesses. But you could negotiate more favorable terms with your account or gateway provider.

How Do You Operate?

The way your business operates can also influence what you’re doing for your payment needs. An online business will benefit from a payment gateway, as it helps create a secure platform for operation. You could collect recurring payments, plus you can start collecting funds in less time when you use a sensible solution.

A gateway may not be as necessary for a business that focuses mostly on in-person sales. A merchant account will often include a platform that helps manage various rates for service. It also helps to have a merchant account if you focus on POS systems, especially since some providers may offer POS setups for your business.

Even then, a gateway may still be critical for in-person businesses. The ways how people order products in-person have been changing over the years. People often purchase items online and get them in a physical location, or they ask for deliveries. Mobile apps also make it easy for people to pay for things in some physical places. A gateway that can support online and mobile payments may be more essential to a physical retailer than one might expect.

What Is the Answer?

The best idea to follow involves getting a suitable gateway that is compatible with the merchant service provider you use. The main focus involves finding a suitable merchant account that provides sensible rates for accepting cards.

Look for your merchant account first, as that will dictate what you will spend on most transactions. The merchant account should also provide a sensible system for work you can trust.

You can look for your gateway after you find your merchant account. But don’t assume that the gateway your merchant service provider will offer is always the right choice. Check around to see what fits your business when using it for a useful merchant account. You may find some ideal choices for your business when you look around at all the available options you can trust.

Watch for how much you’ll spend when combining the two as well. These two systems have different rates for use, and those charges can add up after a while.

Save Time, Money, & Resources

Categories

Latest News

Contact HMS

Ready for the ultimate credit card processing experience? Ask us your questions here.