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What are Merchant Accounts, Payment Gateways and PayPal?

Merchant Account and Payment Gateway

A Merchant Account is a type of account that makes it possible for a third party to verify credit cards for authenticity, process the transaction, and deposit the results into your business bank account.

You can get a merchant account from a bank or a non-bank provider. Banks tend to be considered more reliable and secure, but they are generally more selective in providing accounts. Non-bank providers may be reputable and secure, but be careful when choosing as not all of them are. They tend to be less selective than banks and their rates are often higher. Non-bank providers go to the banks on your behalf to get a merchant account for you. They accept the risk of their customers not paying or being fraudulent. An example of a great non-bank provider is Website Payments Pro by PayPal.

A Payment Gateway is like an online credit card processing terminal and is required to process credit card payments through your website's shopping cart to your merchant account.


PayPal is an email payment system. All you need is a credit/debit card or bank account and an email address to set up a PayPal account. You can then accept payments from customers with PayPal accounts. With a PayPal Business account you can also accept payments from customers that don't have a PayPal account. PayPal's added security and purchase protection, plus their affiliation with eBay, put some people more at ease with shopping online.


Green Warning To provide the most payment options for your clients, our shopping cart allows you to offer payment processing through both a merchant account/payment gateway and PayPal, without necessarily having to choose one or the other.


Related Articles:
Payment Processing Options for CAD$
Payment Processing Options for AUD$
Getting a Merchant Account - Millenium Bankcard
An Introduction to the Shopping Cart
Set up for US$ credit card processing
PayPal Standard
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Solution #: 6131448
Category: Edit Store > Intro
Type: Knowledge Base
Status: Published

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