What is the difference between a Merchant account and a payment processor? can you give examples please, to simiply the clarifation. paypal for example ?
To receive online payments through credit or debit cards, you will need either a merchant account and payment gateway software, or a third party payment processor. You need the merchant account to establish an account with a financial institution, and you will need a payment gateway software to actually accept credit/debit card transactions on the internet. You may get your merchant account and payment gateway software from the same provider or you may choose to get them separately, from more than one provider. You will most likely need to complete some financial documents to get a merchant account/payment gateway. A third party payment processor allows you to accept credit/debit card transactions online using its own payment system. You may get a free account you can use with a third party payment processor on the internet, and you may be asked to verify your identity too by a third party payment processor. Examples of third party payment processors are Paypal, AlertPay etc. Merchant account/payment gateway providers and third party payment processors may be refer to too, as payment processors.
Very good explanation here... you may want to look into your own "merchant account" once you have build up some processing history with a "payment processor" typically it is a 3rd party biller like 2co or paypal.
iNicheMkt pretty much hit the nail on the head. If you're looking for a good merchant provider and gateway software, check out CDG Commerce.
In simplest terms, a payment processor enables merchants to accept electronic payments. In the offline world the phrases merchant account and payment processor are used interchangeably. For example, a business signs up for a merchant account with a payment processor so that they can accept Visa, MasterCard, Discover, American Express, Diners Club, and or JCB in a retail card swipe environment. In the online world, there are third party payment processors that do not issue "merchant accounts". Instead, these parties clear payments within their own payment system. For example, Paypal is a third party processor and gateway all in one. With a merchant account, a business can accept payment from any source- mobile, online, retail etc- provided they have the correct connectivity solutions and the processor supports it (most do). To accept payments online, the business with a merchant account will also need a gateway. There is a significant price difference. All cards have an associated interchange rate. There are 100's of rates and 100's of variables that determine what the actual cost of processing any transaction will be. The third party processor makes money by charging you a fixed rate and keeping the difference between your quoted rate and the actual interchange cost. If you have a merchant account, you can participate in the entire spectrum of interchange rates- rather than an inflated fixed rate. There are many price plans. The most complex to understand is actually the lowest cost. In this case the merchant pays 'PASS THROUGH" interchange fees for all cards plus a merchant discount ( the payment processor profit mark-up). There are dozens of payment processors, marketed through thousands of Independent Service Organizations (ISO). First Data and Paymentech are the largest payment processors. Payment Processing Direct, First Payment Systems are examples of ISO's. There are very few third party payment processors, at least with any significant US marketshare. Google payments and Paypal are examples.