E-commerce has become an integral part of our daily lives. And there is no end to what we can purchase online. From groceries to electronics, we can buy almost anything.

And if you are selling something in your brick and mortar shop, it is better to set up an online face for it. Not convinced? Think about how many restaurants are accepting food orders online. And question yourself: how regularly you are placing orders online for a product. Makes sense, right?

Do you think just putting up a shiny new website is enough to start selling online?

If yes, you get the wrong picture, and you only know a piece of the pie. The other part is accepting the payments.

Understanding three things are essential to start accepting the payments for your eCommerce store. They are:

  1. Payment Gateway

  2. Payment Processor

  3. Merchant Account.

Before diving into each one of them, you should be familiar with four elements involved in a typical eCommerce transaction.

  • Customer

  • Merchant

  • Issuing Bank

  • Acquiring Bank

The customer is the one who pays for the products. And the merchant is the one who sells the products through his eCommerce store.

The issuing bank issues the customer credit/debit card. And the acquiring bank is where the merchant gets an account from.

Apparently, the transaction happens between the customer and the merchant. But the issuing bank and the acquiring bank play a significant role in moving the money from the customer to the merchant.

Now, let’s dive into understanding three components you should rely on to make a transaction successful: Payment Gateway, Payment Processor, and Merchant Account.

Payment Gateway

As the name suggests, a Payment Gateway helps you to start accepting payments through credit/debit cards.

So, when a customer wants to check out something from your eCommerce store, you take the help of Payment Gateway to charge the customer’s credit card. In turn, the Payment Gateway submits the transaction to a Payment Processor.

Simply put, a Payment Gateway is a bridge between your eCommerce store and the Payment Processor. Moreover, it gathers the approval from the issuing bank, and lets you know that you can deliver the products.

Since the Payment Gateway involves in handling the transaction, it should use an SSL certificate. Also, your eCommerce store should use an  SSL certificate, because you control the customer data to an extent. Although you are taking the help of Payment Gateway to accept payments, you should take utmost care in managing customer information. And for that, you have to buy SSL certificate. Otherwise, data thefts would be inevitable.

Put it another way, without proper configuration of SSL certificate on your eCommerce store, you may run into bigger troubles.

In addition, a Payment Gateway also aids in preventing malicious transactions and credit card fraud.

Payment Processor

The Payment Gateway submits the transaction to the Payment Processor. And the Payment Processor is responsible for processing the transaction further and finally sending the money into Merchant Account. It works with the acquiring bank and the issuing bank to get things done.

So, the Payment Processor acts as a connector between the Payment Gateway and the Merchant Account.

Merchant Account

The Merchant Account is nothing but the bank account held by the Merchant.

Typically banks and the corporate institutions with appropriate license will issue and operate Merchant Accounts.

How Do These Three Components Work in Reality?

In general, some Payment Processors also provide the Payment Gateway.

Let’s look into some of them.


Stripe acts as both the Payment Gateway and Payment Processor, taking the needless hassle out of the way.

Using Stripe, you can accept payments from customers anywhere in the world. And the best part is you do not even need to pay any setup or monthly fee. You pay a flat fee per each transaction. That’s it.

Stripe also provides developer APIs. So, you can adjust your eCommerce store with Stripe payments to create a seamless shopping experience for your customers.


PayPal has users all around the world. And for that reason, many people are comfortable to pay through their PayPal accounts.

If you want minimal to no setup, you should go with PayPal. Moreover, there are no set up fees. You pay a flat fee for each transaction. The more the transaction volumes, you get better discounts on the fees being charged.

However, if you want to use any other Payment Gateway, ensure that you can accept PayPal. Because your new customers might not be comfortable with giving out their credit card details.


Cryptocurrencies like Bitcoin are the hot trend in the tech world. Moreover, in Japan, thousands of merchants accept Bitcoin as a legal tender.

If you want to accept cryptocurrencies like Bitcoin and Bitcoin Cash, Bitpay is the perfect solution.

But you might wonder that cryptocurrencies are highly volatile, and you can be on the losing side.

Anyhow, that volatility should not bother you.

Bitpay will automatically convert cryptocurrencies in fiat currencies like US Dollar and makes settlements to your merchant accounts.

However, accepting Bitcoin and other cryptocurrencies might not be legal in your jurisdiction, check with your local authorities before accepting Bitcoin.


Now, you know that how Payment Gateway, Payment Processor, and Merchant Account play a role in your online selling. However, these concepts can be confusing at times.

And if you are just starting with a handful of products, then signing up for fully managed services like Shopify is better.

Shopify is easy to use. Moreover, it comes with an integrated payment gateway. So, you can start as quickly as possible. Also, all technicalities like hosting, SSL certificate, and maintenance are under the hands of Shopify. All you need to is to open your browser and start listing out your products.

Such services also come with excellent technical support. So, if you ran into a problem, getting a resolution would be quick and easy.

That said, not every eCommerce store is the same. And it would help if you got a clear picture on how to maintain it, which service to choose, and how to add an SSL certificate.