Arguably the most exciting aspect of starting an online business is accepting that first payment on the product or service you're looking to publicly solicit. However, before your business can take off and rake in ecommerce sales, you must distinguish the difference between a payment processor and a merchant account.
The difference between the two is as follows:
Merchant accounts: In this instance, merchant accounts are bank accounts of a given retailer that permits payments from either debit or credit cards of their consumers. Also known as a payment gateway, merchant accounts can securely authorise ecommerce payments from patrons for a retailer's website. While a merchant account can accept various forms of payment, it still acts as the gateway between the merchant and the actual payment processor.
Payment processor: Once the transaction is accepted on the retailer's end, it has to be passed along to a verified payment processor to be completed. Payment processors execute the transaction by transmitting data between the merchant, the merchant's bank, the consumer's card and their bank. They're typically the companies that provide the hardware at a storefront location. Payment gateways are essentially the online equivalent of the hardware that consumers swipe their cards through at brick-and-mortar locations.
Since a payment processing partner is so vital to a new ecommerce website, it is wise to select the right platform for your business. Today's processors offer a wide variety of capabilities, which makes it all the more important to choose the right one. Listed below are a handful of components to consider when looking for the right payment processing provider:
Selecting the right payment processor for your business doesn't have to be challenging, but new-business owners must do the right amount of research before choosing a partner to work with. Different providers will likely meet the needs of various platforms, but it's up to you to choose the one that best aligns with your current and future objectives. A healthy and positive working relationship can lead to a higher volume of ecommerce transactions.