Do you need a merchant account, a processor, and a gateway, or can one company cover all three?
Summary
One company can cover all three. Stripe's standard plan and Authorize.Net's All-in-one plan both do. The roles stay separate underneath: the merchant account holds card proceeds, the processor moves each transaction between you and the card issuer, and the gateway carries card details from an online checkout into that system. Buying them separately still happens, most often when a business with an existing merchant account adds a gateway, and then each piece has its own fee.
Three jobs, in Stripe's words
Stripe defines a payment processor as a company or service that facilitates the transfer of funds between a customer and a business. A payment gateway acts as a digital checkpoint, encrypting and securely transmitting sensitive online transaction data. A merchant account is a specialized bank account that lets a business accept and process credit and debit card payments.
That last one is not your everyday business checking account. In a separate explainer, Stripe says a merchant account holds on to funds before they are transferred to the business's primary bank account.
The same company sells it both ways
Authorize.Net publishes two card plans side by side.
All-in-one bundles a merchant account and the gateway for $25 a month plus 2.9% + 30¢ per transaction, subject to eligibility.
Gateway only is for businesses that already accept cards through a merchant account with a bank or another provider. It costs $25 a month, 10¢ per transaction, and a 10¢ daily batch fee, with a 0.00% card discount rate. The processing charges come from the merchant account, on a separate bill.
Stripe goes further in the bundled direction. Its standard plan has no setup fee and no monthly fee and charges 2.9% + 30¢ per successful transaction on domestic cards. You never see a merchant account or a gateway, yet both jobs are being done inside that one rate.
What the difference costs an online store
Take a month with 200 online orders averaging $50, or $10,000 in card sales.
The first two share the same percentage and per-sale charge, so the whole gap is the $25 monthly fee. The Gateway only figure looks low because it leaves out the part that costs the most. Against Stripe, the fair comparison is $48 plus whatever your existing merchant account charges to process $10,000.
A counter-only shop has no gateway to pay for
A gateway is an online front door, so a shop that only takes cards at a terminal has no use for one. Chase's published pricing, for example, has three rows: 2.6% + 10¢ for tap, dip, or swipe, 2.9% + 25¢ for e-commerce, and 3.5% + 10¢ for keyed transactions and payment links. There is no separate gateway charge. Online orders are billed at the e-commerce rate.
Sources
- stripe.com/resources/more/payment-processor-vs-gateway-vs-merchant-acc…
- stripe.com/resources/more/merchant-accounts-101
- authorize.net/sign-up/pricing.html
- stripe.com/pricing
- chase.com/business/payments/merchant-fees
Related on this site
- What are you actually buying when you sign up for merchant services?
- Is a merchant account just another business bank account?
- Why does a keyed-in or online card payment cost a merchant more than a tapped one?
- Do online card payments cost more than in-person ones?
- Why interchange-plus pricing cannot be totaled
- Every provider we hold, and which publish a rate
- Effective rate calculator
Written by Kaz (pen name). Figures are copied from providers' published pricing pages on the dates shown. We have not used these products. Corrections: contact form.