Difference between the merchant account and payment gateway

β€œA journey of a thousand miles begins with a single step.”

Lao Tzu

Anyone who is running or new to the online business and wants to accept payments via Credit/Debit card or any other online mode of payment, get confused by not knowing the difference between the merchant account and payment gateway.

Even our majority of the clients too got confused for a while in their initial phase but it is important to know the difference so that one can arrange a better option for his online business.

So in this article, We would briefly try to make you understand the difference between the merchant account and payment gateway. We will try to be as simple so that even a newbie would be able to understand.

Payment Gateway

Payment Gateway is basically a designed software that transfers the information of the transaction from merchant to the acquiring bank. In other words, it’s a rope between the business owner(merchant) and the bank.

However, it takes 6-12 seconds in a single transaction to complete as the process includes encrypted of the transaction data as it contains confidential credentials for both the parties, especially for the customer.

So always go for a payment gateway who is PCI DSS Certified which means that the company is eligible for processing the transaction details.

Merchant Account

Basically, a merchant account is a place where your funds would be deposited after a successful transaction takes place. The initial stage for any type of online business is to set-up a merchant account.


Because all the transactions would take place via credit/debit card or any other mode of online payment methods like through online banking, digital wallet- after the approval from the payment gateway, and acquiring bank. So a merchant account would be necessary as it allows your business to accept online payments through credit/debit card on behalf of your business around the world.

Need a payment gateway for your business or want to start your own online business?

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