{"id":1524,"date":"2022-07-28T12:36:59","date_gmt":"2022-07-28T07:06:59","guid":{"rendered":"https:\/\/in.nttdatapay.com\/blog\/?p=1524"},"modified":"2025-09-04T17:01:52","modified_gmt":"2025-09-04T11:31:52","slug":"difference-between-a-payment-gateway-and-a-merchant-account","status":"publish","type":"post","link":"https:\/\/in.nttdatapay.com\/blog\/difference-between-a-payment-gateway-and-a-merchant-account\/","title":{"rendered":"What Is The Difference Between A Payment Gateway And A Merchant Account?"},"content":{"rendered":"\r\n<p>Payment gateways, payment processors, merchant accounts &#8211; all these terms might seem a tad bit confusing if you are in the e-commerce business and are planning to accept digital payments from your customers. Most often, the terms \u2018payment gateway\u2019 and \u2018merchant account\u2019 are misunderstood to be the same. Well, that is not true.<\/p>\r\n\r\n\r\n\r\n\n<div class=\"wpcf7 no-js\" id=\"wpcf7-f2460-o1\" lang=\"en-GB\" dir=\"ltr\" data-wpcf7-id=\"2460\">\n<div class=\"screen-reader-response\"><p role=\"status\" aria-live=\"polite\" aria-atomic=\"true\"><\/p> <ul><\/ul><\/div>\n<form action=\"\/blog\/wp-json\/wp\/v2\/posts\/1524#wpcf7-f2460-o1\" method=\"post\" class=\"wpcf7-form init\" aria-label=\"Contact form\" novalidate=\"novalidate\" data-status=\"init\">\n<fieldset class=\"hidden-fields-container\"><input type=\"hidden\" name=\"_wpcf7\" value=\"2460\" \/><input type=\"hidden\" name=\"_wpcf7_version\" value=\"6.1.4\" \/><input type=\"hidden\" name=\"_wpcf7_locale\" value=\"en_GB\" \/><input type=\"hidden\" name=\"_wpcf7_unit_tag\" value=\"wpcf7-f2460-o1\" \/><input type=\"hidden\" name=\"_wpcf7_container_post\" value=\"0\" \/><input type=\"hidden\" name=\"_wpcf7_posted_data_hash\" value=\"\" \/><input type=\"hidden\" name=\"_wpcf7_recaptcha_response\" value=\"\" \/>\n<\/fieldset>\n<div class=\"cus-form\">\n\t<p style=\"font-size: 24px;font-weight: 600;text-align: center;\">Enquire Now\n\t<\/p>\n\t<p><label>Products Required:<\/label><span class=\"wpcf7-form-control-wrap\" data-name=\"products\"><select class=\"wpcf7-form-control wpcf7-select wpcf7-validates-as-required form-control\" aria-required=\"true\" aria-invalid=\"false\" name=\"products\"><option value=\"Payment Gateway\">Payment Gateway<\/option><option value=\"POS Machine\">POS Machine<\/option><option value=\"Reseller\">Reseller<\/option><\/select><\/span><br \/>\n<span class=\"wpcf7-form-control-wrap\" data-name=\"uname\"><input size=\"40\" maxlength=\"400\" class=\"wpcf7-form-control wpcf7-text wpcf7-validates-as-required form-control\" aria-required=\"true\" aria-invalid=\"false\" placeholder=\"Name*\" value=\"\" type=\"text\" name=\"uname\" \/><\/span><br \/>\n<span class=\"wpcf7-form-control-wrap\" data-name=\"phone\"><input size=\"40\" maxlength=\"400\" class=\"wpcf7-form-control wpcf7-tel wpcf7-validates-as-required wpcf7-text wpcf7-validates-as-tel form-control\" aria-required=\"true\" aria-invalid=\"false\" placeholder=\"Phone*\" value=\"\" type=\"tel\" name=\"phone\" \/><\/span><br \/>\n<span class=\"wpcf7-form-control-wrap\" data-name=\"email\"><input size=\"40\" maxlength=\"400\" class=\"wpcf7-form-control wpcf7-email wpcf7-validates-as-required wpcf7-text wpcf7-validates-as-email form-control\" aria-required=\"true\" aria-invalid=\"false\" placeholder=\"Email*\" value=\"\" type=\"email\" name=\"email\" \/><\/span><br \/>\n<span class=\"wpcf7-form-control-wrap\" data-name=\"message\"><textarea cols=\"10\" rows=\"3\" maxlength=\"2000\" class=\"wpcf7-form-control wpcf7-textarea form-control\" aria-invalid=\"false\" placeholder=\"Message\" name=\"message\"><\/textarea><\/span><br \/>\n\t\n\t<input class=\"wpcf7-form-control wpcf7-hidden\" id=\"utm\" value=\"\" type=\"hidden\" name=\"utm\" \/><input class=\"wpcf7-form-control wpcf7-submit has-spinner\" type=\"submit\" value=\"Submit\" \/>\n\t<\/p>\n<\/div>\n<style>\n.cus-form .form-control{width: 100%!important;margin: 7px 0px;padding: 8px;border-radius: 3px;height: auto;line-height: 20px;}\n.cus-form{display: block;margin: 0 auto;max-width: 400px;width: 100%;padding: 20px;box-shadow: 0px 0px 4px 0px #0000002b;border-radius: 6px;margin-bottom: 25px;padding-bottom: 0px;}\n.cus-form .wpcf7-submit{margin: 0 auto;display: block;}\n.cus-form h3{background: #ff6644;text-align: center;margin: -21px;margin-bottom: 20px;padding: 6px;}\n<\/style>\n<p><script>\ndocument.getElementById(\"utm\").value = window.location.href;\n\ndocument.addEventListener( 'wpcf7mailsent', function( event ) {\n location = 'https:\/\/in.nttdatapay.com\/blog\/thankyou\/';\n}, false );\n<\/script>\n<\/p><div class=\"wpcf7-response-output\" aria-hidden=\"true\"><\/div>\n<\/form>\n<\/div>\n\r\n\r\n\r\n\r\n<p><strong>Let us break down the terms in simple words first.<\/strong><\/p>\r\n\r\n\r\n\r\n<p>A <a href=\"https:\/\/in.nttdatapay.com\/online-payment-gateway-india\">payment gateway<\/a> makes it possible for you to execute online transactions, whilst a merchant account acts like a holding account where all the funds initially arrive before being transferred to your business\u2019s bank account.\u00a0<\/p>\r\n\r\n\r\n\r\n<p>In order to conduct hassle-free transactions, you need to have them both. Keep reading further to understand the terms better and in more detail.<\/p>\r\n\r\n\r\n\r\n<div class=\"wp-block-buttons is-layout-flex wp-block-buttons-is-layout-flex\">\r\n<div class=\"wp-block-button aligncenter\"><a class=\"wp-block-button__link has-white-color has-vivid-cyan-blue-background-color has-text-color has-background wp-element-button\" href=\"https:\/\/in.nttdatapay.com\/online-payment-gateway-india?utm_source=Singleblog&amp;utm_medium=Blog&amp;utm_campaign=Payment+Gateway\">Click Here For More Details About Payment Gateway<\/a><\/div>\r\n<\/div>\r\n\r\n\r\n\r\n<p>&nbsp;<\/p>\r\n\r\n\r\n\r\n<h2 class=\"wp-block-heading\">Difference Between a Payment Gateway and a Merchant Account<\/h2>\r\n\r\n\r\n\r\n<p><strong>A merchant account<\/strong> serves as a holding account for all the data collected on payment transactions. The funds of any business that accepts credit cards are stored here.\u00a0 After the payment is confirmed, the money is transferred to your business bank account.<\/p>\r\n\r\n\r\n\r\n<p>When a payment transaction is cleared, <strong>a payment gateway<\/strong> establishes a connection between the customer&#8217;s bank account and your merchant account, allowing money to flow into the latter.\u00a0<\/p>\r\n\r\n\r\n\r\n<blockquote class=\"wp-block-quote is-layout-flow wp-block-quote-is-layout-flow\">\r\n<p><strong>NTT DATA Payments offers a complete payment solution to your <a href=\"https:\/\/in.nttdatapay.com\/blog\/how-to-select-the-best-payment-gateway-for-travel-businesses\/\">business with their payment gateway services<\/a>, ensuring a seamless experience of accepting and managing online payments.\u00a0<\/strong><\/p>\r\n<\/blockquote>\r\n\r\n\r\n\r\n<p>To put it in simpler words, a merchant account is more like the destination, while the payment gateway is the means you get to the destination. An easy analogy to better understand the difference is to think of the merchant account as a central railway station and the payment gateway as the railway lines. Payment transactions are trains moving along the railway lines to reach the railway station.\u00a0<\/p>\r\n\r\n\r\n\r\n<h2 class=\"wp-block-heading\">Payment Gateway vs Payment Processor<\/h2>\r\n\r\n\r\n\r\n<figure class=\"wp-block-table\">\r\n<table>\r\n<tbody>\r\n<tr>\r\n<td><strong>PAYMENT GATEWAY<\/strong><\/td>\r\n<td><strong>PAYMENT PROCESSOR<\/strong><\/td>\r\n<\/tr>\r\n<tr>\r\n<td>The mechanism that delivers payment information from the point of entry to the payment processor is known as a payment gateway. Additionally, it informs the merchant or the customer of the clearance or denial.<\/td>\r\n<td>A payment processor is in charge of communicating transaction information to and from the merchant&#8217;s acquiring bank and the customer&#8217;s card-issuing bank.<\/td>\r\n<\/tr>\r\n<tr>\r\n<td>A payment gateway is mostly used in e-commerce businesses to accept payments via online means,\u00a0 <a href=\"https:\/\/www.nttdatapay.com\/swipecard-pos-machine\" target=\"_blank\" rel=\"noopener\">POS machines<\/a>, card readers, or software integration.<\/td>\r\n<td>A payment processor is used for all card-based transactions, irrespective of where and where they occur.<\/td>\r\n<\/tr>\r\n<\/tbody>\r\n<\/table>\r\n<\/figure>\r\n\r\n\r\n\r\n<h2 class=\"wp-block-heading\">MERCHANT ACCOUNT<\/h2>\r\n\r\n\r\n\r\n<h3 class=\"wp-block-heading\">Benefits of a Merchant Account<\/h3>\r\n\r\n\r\n\r\n<p><strong>A merchant account helps you in many ways. Here are a few benefits:<\/strong><\/p>\r\n\r\n\r\n\r\n<ul class=\"wp-block-list\">\r\n<li>It groups all the transactions made and deposits them in your business\u2019s bank account in one go. This way, keeping track of transactions and managing accounts is easier.<\/li>\r\n\r\n\r\n\r\n<li>It helps you deal with uncertainties in transactions like customer returns.<\/li>\r\n\r\n\r\n\r\n<li><a href=\"https:\/\/in.nttdatapay.com\/blog\/difference-between-a-payment-gateway-and-a-merchant-account\/\">Merchant accounts<\/a> also check for fraud in transactions. It stops suspicious and questionable transactions from entering your business\u2019s bank account, thus saving you money from large transactions.\u00a0<\/li>\r\n<\/ul>\r\n\r\n\r\n\r\n<h3 class=\"wp-block-heading\">How to Acquire a Merchant Account?<\/h3>\r\n\r\n\r\n\r\n<p>Most payment gateways offer all payment solutions, i.e., they provide customers with a merchant account, payment gateway, and a payment processor. So if you are thinking about setting up these, make sure you find a full-service payment solution provider who will provide you with everything you need. Some payment gateways offer only gateway service and expect you to set up a merchant account on your own. However, that is not the best idea. Choose a <a href=\"https:\/\/in.nttdatapay.com\/blog\/best-payment-gateway-for-your-business\/\">payment gateway that is also a payment solution provider<\/a>.<\/p>\r\n\r\n\r\n\r\n<h2 class=\"wp-block-heading\">How to Choose a Merchant Account?<\/h2>\r\n\r\n\r\n\r\n<p>Before you choose a merchant account for your business, you must know the types of merchant accounts. There are two main types of merchant accounts:\u00a0<\/p>\r\n\r\n\r\n\r\n<ol class=\"wp-block-list\">\r\n<li><strong>Payment Service Provider (PSP) merchant account:<\/strong> This is usually used for small and medium businesses and is quite easy and quick to set up. Though it is a much more affordable option for many businesses, it comes with a risk of vulnerability since this type of merchant account expects you to share your account with other merchants.<\/li>\r\n\r\n\r\n\r\n<li><strong>Independent Sales Organization (ISO) merchant account: <\/strong>This is an individual and dedicated merchant account for your business that need not be grouped with other merchant accounts. This is mostly used by large businesses and is a bit complex to set up. It also incurs a huge amount of money for setting up. However, it offers low transaction fees.<\/li>\r\n<\/ol>\r\n\r\n\r\n\r\n<p>When choosing the right fit for your business, you must consider many factors like price and payment plans, processing and chargeback fees, and the merchant account provider\u2019s anti-fraud tools.\u00a0<\/p>\r\n\r\n\r\n\r\n<h2 class=\"wp-block-heading\">PAYMENT GATEWAY<\/h2>\r\n\r\n\r\n\r\n<h2 class=\"wp-block-heading\">Why Do You Need a Payment Gateway?<\/h2>\r\n\r\n\r\n\r\n<p>A payment gateway serves many functions, including<\/p>\r\n\r\n\r\n\r\n<ul class=\"wp-block-list\">\r\n<li><strong>Security:<\/strong> A payment gateway captures and encrypts the customer\u2019s account information at the time of checkout. This keeps the data safe and secure from cyberattacks and fraudulent transactions.\u00a0<\/li>\r\n\r\n\r\n\r\n<li><strong>Routing the information:<\/strong> With the information gathered, the payment gateway routes them to the payment processor or the merchant account, where more security checks are done before transferring the amount to the business\u2019s bank account.<\/li>\r\n\r\n\r\n\r\n<li><strong>Merchant gets to decide:<\/strong> Whenever there is an issue with the transaction, the payment gateway will ask the merchant what they want to do or how they would like to proceed. The merchant can decide whether to continue with the transaction or go for an alternative mode of payment.<\/li>\r\n<\/ul>\r\n\r\n\r\n\r\n<h2 class=\"wp-block-heading\">How to Choose a Payment Gateway Service Provider?<\/h2>\r\n\r\n\r\n\r\n<p>Just like how you need to choose the right merchant account according to your business needs, you must select a payment gateway that will help your business offer seamless payment services for your customers.\u00a0<\/p>\r\n\r\n\r\n\r\n<p>Some payment gateways work only for specific banks and merchant accounts. Some might not work with payment modes preferred by your customer. You have to research well and find the one that will offer maximum services and benefits to your business.<\/p>\r\n\r\n\r\n\r\n<h3 class=\"wp-block-heading\">You can keep these points in mind while selecting a payment gateway<\/h3>\r\n\r\n\r\n\r\n<ol class=\"wp-block-list\">\r\n<li>Check if the payment gateway provider offers multiple payment options. Customers prefer different modes of payment like<a href=\"https:\/\/in.nttdatapay.com\/blog\/rbi-implements-new-norms-for-credit-debit-and-co-branded-cards\/\"> credit\/debit cards<\/a>, e-wallets, mobile payment, or direct debit. Make sure your payment gateway provider offers all of these options.<\/li>\r\n\r\n\r\n\r\n<li>Find out if your payment gateway provider offers good fraud protection tools. Fraud and other cyberattacks are a constant source of worry for both businesses and customers. If the payment gateway provider does not help with fraud protection, it can harm your business severely.<\/li>\r\n<\/ol>\r\n\r\n\r\n\r\n<h3 class=\"wp-block-heading\">You should look for other factors like security, support, and processing fees.\u00a0<\/h3>\r\n\r\n\r\n\r\n<blockquote class=\"wp-block-quote is-layout-flow wp-block-quote-is-layout-flow\">\r\n<p><a href=\"https:\/\/in.nttdatapay.com\/\">NTT DATA Payments Services India<\/a> is one of the top payment service providers that provides payment gateway solutions to businesses, both small and big, at competitive prices. They provide end-to-end payment acceptance services through both online and offline channels with a vast range of payment services and offer 100+ cutting-edge payment options<\/p>\r\n<\/blockquote>\r\n\r\n\r\n\r\n<h2 class=\"wp-block-heading\">Conclusion<\/h2>\r\n\r\n\r\n\r\n<p>To wrap up, a merchant account and a payment gateway are not the same. You need to have them both to process and manage payments efficiently and securely. As a business owner, it is your responsibility to research them and choose the ones that perfectly fit your business and its needs.<\/p>\r\n<!-- AddThis Advanced Settings generic via filter on the_content --><!-- AddThis Share Buttons generic via filter on the_content -->","protected":false},"excerpt":{"rendered":"<p>Payment gateways, payment processors, merchant accounts &#8211; all these terms might seem a tad bit confusing if you are in the e-commerce business and are planning to accept digital payments&#8230; <!-- AddThis Advanced Settings generic via filter on get_the_excerpt --><!-- AddThis Share Buttons generic via filter on get_the_excerpt --><\/p>\n","protected":false},"author":1,"featured_media":4866,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[17,16],"tags":[],"class_list":["post-1524","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-general","category-payment"],"_links":{"self":[{"href":"https:\/\/in.nttdatapay.com\/blog\/wp-json\/wp\/v2\/posts\/1524","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/in.nttdatapay.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/in.nttdatapay.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/in.nttdatapay.com\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/in.nttdatapay.com\/blog\/wp-json\/wp\/v2\/comments?post=1524"}],"version-history":[{"count":9,"href":"https:\/\/in.nttdatapay.com\/blog\/wp-json\/wp\/v2\/posts\/1524\/revisions"}],"predecessor-version":[{"id":5086,"href":"https:\/\/in.nttdatapay.com\/blog\/wp-json\/wp\/v2\/posts\/1524\/revisions\/5086"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/in.nttdatapay.com\/blog\/wp-json\/wp\/v2\/media\/4866"}],"wp:attachment":[{"href":"https:\/\/in.nttdatapay.com\/blog\/wp-json\/wp\/v2\/media?parent=1524"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/in.nttdatapay.com\/blog\/wp-json\/wp\/v2\/categories?post=1524"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/in.nttdatapay.com\/blog\/wp-json\/wp\/v2\/tags?post=1524"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}