Understand the concepts of Merchant Account and Payment Gateway

These terms have become increasingly popular and are now a modern trend.

Merchant Account and Payment Gateway are two common expressions in the vocabulary of traditional and electronic trade entrepreneurs. Through these tools, it is possible to improve your transaction systems, always in the following ways:

  • Dynamism
  • Efficiency
  • Safety

Do you want to get a better understanding of these concepts and know how they can be applied in your business? Continue with our article.

What is Payment Gateway?

Can be referred to as 'Payment Portal' or 'Payment Gateway', this term refers to the connection technology between merchants and financial centre networks. Through it, a store can integrate several of its operations with online card processing resources.

Payment Gateway generally works through ten steps at six different points. They are:

  1. Integration - As we mentioned above, it is the moment when the commercial procedures relate in one or more different ways to the card.
  2. Protection - The tool encrypts the customer's payment information and uses internal functions to forward this data through the seller to the Payment Gateway.
  3. Merchant account - Finally, we come to the second topic of our content. In short, the Merchant Account is one of the most fundamental steps in this process. At this stage, possible fraud is checked and, if there is no problem, the data is forwarded to the next level.
  4. Another check - At that time, the information is sent to a payment processor or an acquiring bank. Then, one more screening is done, and another fraud check is performed.
  5. Forwarding - After the above checks, the transaction is sent to the card's online networks.
  6. The answer - Payment Gateway sends a response to the merchant validating or invalidating the transaction. That way, the seller can finish the process or request new forms of payment.

It is worth mentioning that all these steps take place within a few seconds, thanks to the various specialised technologies in this medium.

What is the difference between Merchant Account and Business Bank Account?


Merchant Account has a direct relationship with the Business Bank Account, but these two models are not the same. The first works as a temporary safe, a place that only serves to store deposits. The second is a traditional commercial bank account, as we know it from day to day.

It may seem like an impractical function, but there are considerable advantages to using the first pattern. To exemplify, imagine working with the sale of high-value products. If, for some reason, one of these items needs to be returned, as well as its value, it is ideal that this transaction be made from a Merchant Account.

In addition to being efficient, this practice is extremely safe as it works in parallel with the Business Bank Account. That is, it is possible to use the services of two different banks simultaneously. This model also offers global growth potentials, giving rise to even more solid corporate relationships. This can be done in several ways:

  • Through business facilitation through the customization of the service, which can incorporate currencies from different countries.
  • More sophisticated and, consequently, more protected subscription processes.

It is worth mentioning that there are some systems that work with risk sharing. That is, all merchant accounts served by a particular Payment Gateway can be reconciled through various combinations, which can mean an advantage or disadvantage for certain types of business. Therefore, by investing in this point, it ensures that your company is embedded in what analysts consider most viable for your market.

What is the difference regarding the Payment Processor?

While the previous pattern works the way we explained earlier, the Payment Processor is a bit different. In this model, connections are made directly between merchants and card networks, which we have agreed to call flags - Alelo, HiperCard, Mastercard and Visa, for example.

Payment Gateway, on the other hand, operates through processors connected to those same networks. These bodies enter into resale agreements with the Payment Gateway and are thus made available to merchants. Depending on the magnitude of these processors, it is possible that they work directly with the virtual enterprises.

In addition, there are more advantages

In an era that requires so many abbreviations, the development of comprehensive services is essential. Therefore, this whole tool was developed through dynamism, efficiency, and safety, as we mentioned at the beginning of our publication. To meet this need, many Payments Gateways focus on plurality.

Currently, the use of cryptocurrencies, direct debit, eWallets and bank transfers have been on the rise. Soon, companies in the industry started to invest in the support of some of these methods, an essential action for the popularisation of this plan. The idea is to be an “all in one” option.

Methods of verifying financial authenticity are also sorely needed. Therefore, it is possible to choose from several options in this market, prioritising alternatives that best fit the profile and the needs of each project.

Finally, it is worth mentioning the performance analysis function, which is also extremely popular in this medium. Several analyses, surveys and reports are offered by the companies, aiming at the financial stoning of their customers. In other words, this detailed data can be essential for making new investments, cutting expenses and other actions in this direction.

Is it worth saving?

Spending control is essential for any company. However, focusing only on decreasing expenses can be just as damaging as spending inconsequentially. So, consider the following information to build your verdict on the Payment Gateway.

Betting on a tool that offers partial benefits and outsourcing your add-ons may seem like a viable alternative. However, in the long run, the disadvantages of this model will become apparent. In addition to simplifying your transactions, unifying these resources can help strengthen your brand by increasing revenue. After all, time is money.