As a small business owner, you want to make sure that your customers can pay with their credit cards. If they can’t, your business won’t be able to grow and you’ll lose out on potential revenue. So it’s important to understand the differences between merchant accounts and payment processors like Stripe—and how they work together so that you can get the most out of whichever one(s) you choose.
If you want to accept credit card payments online, you need a merchant account.
If you want to accept credit card payments online, you need a merchant account.
A merchant account is a type of bank account that allows you to accept credit card payments through your website or mobile app. It’s the same thing as an online payment gateway, but the two terms are sometimes used interchangeably.
A payment processor is the company that processes and settles those transactions with your bank. These companies usually charge fees and commissions on every transaction they process for merchants, so it’s not uncommon for them to be integrated into a business owner’s existing banking relationship — because setting up and managing these relationships can be time-consuming and require knowledge of technical details like PCI compliance standards (which dictate how much information about customers must be kept secure).
Stripe acts as a payment processor, connecting your business to the major credit card networks (Visa, Mastercard, American Express and Discover). They also provide a free payment gateway.
Let’s start with the basics. Stripe is a payment processing company, meaning that they act as an intermediary between your business and the credit card networks (Visa, Mastercard, American Express and Discover). They also provide a free payment gateway for businesses in certain countries.
A payment processor handles all of the major back-end logistics when it comes to accepting payments online: storing customer data and securing sensitive information; processing transactions; sending confirmations; collecting funds from customers on behalf of merchants; reconciling disputes within its system; etc.
A merchant account is not the same thing as a payment processor, like Stripe. In fact, you need both somewhere in your tech stack before you can accept credit card payments.
A merchant account is not the same thing as a payment processor, like Stripe. In fact, you need both somewhere in your tech stack before you can accept credit card payments.
A merchant account provides the ability to process credit card payments while a payment processor provides the ability to accept payments online.
For example, if you have a brick-and-mortar store that’s not open 24/7 and don’t have time to manually process cards every time someone buys something from your store (even though they should), then getting a merchant account would be beneficial since it will do it automatically for you via an ATM machine or POS terminal.
You need both a merchant account and a payment processor for your business to accept credit card payments
You need a merchant account to accept credit card payments, and you need a payment processor to accept those payments. If you’ve ever bought anything online, you know that credit cards are a popular way for people to pay for things. When someone pays with their credit card, the money is transferred from the customer’s bank account or credit card company directly into yours—but it’s not as simple as handing over cash.
A payment processor acts like an intermediary between your business and your customers: handling transactions through its own network of banks and other financial institutions. When customers make purchases using their cards on your website, their information is sent through the payment gateway (the part that connects the merchant account with the bank) so that money can be transferred from them into your merchant account (the part of your business where those funds are stored). This process keeps customers’ personal data safe by isolating it within different systems—and it also allows businesses like stripe to offer lower rates than traditional banks do because they don’t have any overhead costs related specifically towards managing customer accounts directly themselves
Conclusion
As you can see, Stripe merchant account is a great option for accepting payments online. But if you’re planning on accepting credit card payments and don’t have any retail experience, it might be best to work with a company that specializes in this area.
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