Payment gateways provide businesses with a service for accepting credit and debit card payments online. They link between your merchant account and bank that processes credit card transactions, transferring funds between them. Payment gateways also verify customer information before communicating with card networks to authorize payments – often confused with merchant accounts when in fact they’re distinct entities.

Gateways can serve as virtual terminals, turning your computer into a point-of-sale (POS) device when taking payments by phone or mail. They even enable customers to enter in credit card data directly into forms on your website – making this option ideal if you don’t wish to invest in additional virtual terminal software solutions or full POS systems.

Your payment types and anticipated transaction volumes each month should dictate which gateway best meets your business needs. Think carefully about whether mobile payments, ACH/eCheck transactions and international payments need to be supported; and also ensure your chosen gateway meets level 1 compliance for protecting financial data by using encryption or other safeguards.

As part of your considerations when selecting a gateway, cost and integration capabilities should also be taken into account. Many offer APIs or plugins that make integrating them easily into existing software programs for easier accounting and reconciliation processes. Also look for gateways which support currencies and cards your customers use frequently.

Payment gateways also provide tools to combat fraud by verifying credit card and transaction information. They can validate customer addresses and card codes to confirm who the card belongs to; screen transactions for suspicious activity like chargeback scams; and block fraudulent attempts before they reach merchant accounts.

Merchant accounts are special bank accounts designed to hold your funds from credit and debit card transactions until it can be transferred directly into your personal business checking account, typically two business days later. They are commonly known as either business or retail merchant accounts depending on where your customers reside or do business.

Though some payment gateway services include merchant accounts, it is essential to remember that each comes with its own fees and charges. Before signing any contract for any payment gateway solution, always read all relevant fine print carefully and understand all associated costs – both monthly fees for service as well as transaction-based and other charges that might apply. Depending on the provider and industry sector involved, transaction costs could be quite costly so research must be conducted beforehand if choosing the wrong solution could cost your business both in terms of time and money.