In order to process credit cards from a website you need both a payment gateway and merchant account. The following are the fees for a merchant account:
- Discount rate
- Transaction fee
- Batch close fee
- Statement fee
The following are the fees for a payment gateway:
- Monthly fee
- Transaction fee
The payment gateway is to a website what a credit card terminal is to a brick and mortar store, the gateway is basically the mechanism for submitting the credit card transactions and getting an authorization on the credit card. A gateway is a web server with software that will accept post requests or XML documents sent from your website. The gateway takes the submitted credit card or ACH transaction and presents it to the processing bank and awaits a response. It then returns this information to your website and returns an approval or decline message. In short, a gateway connects your website to your merchant account. Click here to see a simple flowchart that illustrates the process.
So the payment gateway is required for ecommerce transactions. If you find a company that offers you a payment gateway with no transaction fee then they are bundling the fees together with the merchant account to appear they are not charging a transaction fee on the gateway. Click here read more about payment gateways and associated fees, there is a list of all the maor gateways at the bottom of the page.