Some credit card processing companies, such as Square, have their own payment gateways, while others will require the use of third-party providers like. If you accept any type of card payment, you need a payment gateway. Do you need a payment gateway? A payment gateway is the technology that acts as a channel through which encrypted credit card information can travel between the acquiring bank (this is the merchant’s bank) and the issuing bank (this is the bank attached to the customer’s card).However, there is an underwriting process to be approved for a merchant account, which could be a roadblock for some businesses. Per-transaction costs are typically lower with this type of processor, and merchants have greater access to in-house customer service. Stax and Helcim are examples of merchant account providers. They typically offer more options for customization and provide a more stable solution, and the entire transaction takes place within the merchant’s network. Merchant account providers tend to be a better fit for larger or growing businesses. Third parties take on the burden of PCI DSS compliance because transactions take place outside of your platform and network. Usually, you pay third-party processing companies only when you make a sale. For smaller businesses with low transaction volumes, third-party processors like Square or PayPal may offer the simplicity and affordability they are seeking.

Do you need a merchant account or a third-party processor? Sometimes called payment aggregators, third-party processors let merchants bypass setting up a merchant account.

Merchant credit card terminal