Last updated on June 19th, 2021. Posted in Web Design For Online Business.
Being able to accept payments online is the crux of every online business, right? If you can't accept credit cards, you won't have much of an online business! Now in order to accept payments on your website, you'll need to set up a payment processor and a merchant account.
Here are links and resources mentioned in today's video. Enjoy!
Now often times -- and this is totally understandable -- these two components (a payment processor and a merchant account) get confusing. It's easy to mix them up and not clearly understand what they are.
So let's break this down. First, a payment gateway or payment processor is the software or the mechanism that actually makes an online transaction possible.
So when your customer fills out their information and clicks Buy Now, it's the payment gateway that reaches out to your customer's credit card company to ensure that funds are available...and then reports back to your website with either an "approved" message, or a "declined" message.
Setting up a payment gateway might sound technical and kinda complex, but these days it's really easy...and there are a variety of options for you to choose from, including Auhtorize.net, Stripe, PayPal, and others.
As for a merchant account (which is sometimes called an "acquiring account"), here's how this works: After your customer has bought from you, where should your funds be deposited? THAT'S what a merchant account is! So, your merchant account is simply the bank account that your online sales get deposited into.
So for your online business, you'll need both a payment gateway and a merchant account. And so you know, some vendors offer just a payment gateway. For example, Authorize.Net will only process payments for you. Their service is then linked directly to your bank account at Bank Of America or WellsFargo or wherever.
Other vendors, like PayPal and Stripe provide both a payment gateway and a merchant account...and you're probably familiar with how PayPal works...it's an online bank account that you can move money into and out of from your traditional bank account.