Ok so I sell a product online using google checkout and paypal, but I want to have more control over the process so I am going to switch to an on-site cart. But I will need a payment gateway right? And also, what is a merchant account and will I need one? I'll be using zen cart but is there anything else I will need? thanks
You can still use a shopping cart on your website and use Paypal. They do offer different payment options that allow for a seamless transaction. You just need to make sure the shopping cart you choose offers a Paypal as a payment method either natively or through a plug-in/module of some kind. But if you decide to ditch Paypal altogether then you would need a payment gateway and a merchant account. The merchant account handles the payment processing and makes sure you get paid. They see to it that the credit card is valid, and if so, charges that customer. The payment gateway acts as the bridge between your shopping cart and your merchant account. Basically it acts just like a credit card machine does in a retail store. It takes the information you provide it, sends it to the merchant account's processing bank, receives the reply and then gives it back to you (or your shopping cart in your case). Being that you are in the US you have a crapload of merchant account providers available to you and gateways as well. Make sure you shop around as you will find that rates and fees vary tremendously between providers. Do your best not to get locked into a long term contract and avoid a monthly minimum. I would recommend the Authorize.Net payment gateway as they are the most popular choice amongst merchants and are very easy to work with. The odds are whatever shopping cart you chose will already full support it for it.
To simplify the explanation, Paypal and Google Checkout are 3rd party payment processors so basically you are just making use of their services and thus do not require a payment gateway and a merchant account. Typically, a merchant account is one which you can open with your bank which will accept credit card payments so all incoming payments can get 'sweep' into your bank account for you to use. In an off-line or card-swipe environment (ie does not involved no signature like online payment), you will not need a payment gateway, the bank will typically provide you with the card swipe terminal and the credit card slips which you will hook up to the bank network to accept credit card payments and by swiping the card, the bank will check if the card is OK and all you need to do is to send the bank the signed slip and you get your money. But in an online environment, you do not have the card swipe terminal so that is where a payment gateway comes in. That acts as a 'virtual terminal'. This will work pretty much like the card swipe terminal except that it does not require a physical card but just the credit card details and it will be hooked up to the bank. Hope that clarifies it. http://en.wikipedia.org/wiki/Merchant_account will have a more comprehensive explanation.