Merchant Account VS Payment Gateway? Get Both Right

How payment professionals can evaluate provider models and choose a unified approach

If you’ve ever managed cross-border payments, you know that a simple plan to expand to different new countries quickly becomes complex. Multiple banking relationships mean repeating the same due diligence checks.

These challenges arise because payment processing requires two complementary components working together: merchant accounts and payment gateways. You need both—the real choice is whether you manage them separately or through a unified provider.

In this guide, you’ll discover how merchant accounts (specialised bank accounts holding card funds before payout) work with payment gateways (technology that facilitates secure payment acceptance over the internet).

You’ll see where their jobs differ, how provider models affect your bottom line and why many businesses now choose unified platforms that combine both functions for global operations.

How Merchant Accounts and Payment Gateways Work Together

A card payment’s journey from checkout to your bank account involves two key systems working in tandem. The payment process follows a specific sequence:

1. Customer checkout: Your customer enters payment information which the gateway encrypts and sends to the acquiring processor for authorisation
2. Bank authorisation: The customer’s issuing bank approves or declines the transaction
3. Response routing: The approval travels back through the processor and gateway to your site
4. Fund holding: Approved funds move to the merchant account temporarily whilst the gateway confirms success to you and your customer
5. Settlement: The merchant account deposits cleared funds into your main business bank account

This division means gateways focus on secure data transport, fraud detection and real-time processing while merchant accounts handle fund management and settlement timing.

In the past, you needed separate contracts—one with a bank for the account and another with a tech provider for the gateway. Today’s platforms combine both, reducing setup time but sometimes hiding fees within a single rate.

What is a Merchant Account?

A merchant account is a business bank account that temporarily holds transaction funds before transferring them to your primary business account through established settlement procedures.

Unlike your regular business account, you can’t directly access or withdraw from it. Instead, it temporarily stores incoming card and digital wallet transactions before releasing them to your main business account. This account exists for one purpose only: processing payments.

After a transaction gets approved, the acquiring bank sends the money to your merchant account. It sits there briefly—typically one to two business days—while fraud checks run and interchange fees are reconciled. Once cleared, the money moves to your operating account, ready for you to use.

Types of Merchant Account Arrangements

Merchant account arrangements vary in their banking relationships, pricing structures and operational complexity:

• Traditional merchant accounts: Direct relationships with acquiring banks providing dedicated accounts, interchange-plus pricing and individual underwriting based on your business risk profile and transaction history
• Payment facilitator accounts: Sub-merchant arrangements where you share a master merchant account with other businesses, typically offering flat-rate pricing and faster onboarding with simplified underwriting requirements

Your choice affects how quickly you get paid, how clearly you see your fees and how much say you have over fraud tools and dispute handling.

What is a Payment Gateway?

A payment gateway is the technology infrastructure that securely captures, encrypts and routes payment transactions between your checkout system and the financial institutions that approve charges.

The gateway tokenises sensitive card details so your servers never handle them directly. It applies fraud filters before transactions reach the networks, reduces false declines and records everything for your finance team to match against merchant account deposits.

How Unified Payment Platforms Handle Merchant Account and Payment Gateway Requirements

Unified payment platforms provide a single provider relationship that combines the fund-holding role of a merchant account with the data-routing job of a gateway.

Here’s how this approach reduces contract negotiations, technical integrations and team coordination:

Eliminate Separate Banking and Technology Relationships

Many finance teams spend days matching settlement files from banks with gateway reports on different schedules. Support tickets bounce between providers whenever something doesn’t add up. A unified platform ends this chaos.

Since one provider controls both the merchant account ledger and gateway authorisation logs, you get one settlement file and one support contact. Contract terms, service levels and pricing follow a single schedule—no more aligning multiple renewal dates or comparing different price structures.

You submit one set of onboarding documents, go through one compliance review and use one portal for payouts, chargebacks and statements. This means fewer vendors, less coordination work and faster problem-solving when issues arise.

Unified platforms also give you one interface for bank payouts, so you no longer juggle different integrations for wire transfers vs ACH settlements.

Simplify Global Merchant Account Management Across Markets

Opening traditional merchant accounts in multiple countries often means weeks of underwriting, local legal consultations and separate portals to manage. When you launch in a new market, you repeat the entire process.

Unified platforms avoid these hurdles by offering one merchant profile covering many territories. The provider handles local acquiring behind the scenes, connecting each transaction to your global account and converting currencies as needed.

With different currencies supported, you see balances in a single dashboard instead of cross-referencing all currency symbols in multiple bank portals. You track balances, fees and chargebacks for all regions in one dashboard, shortening month-end reconciliation and helping you enter new markets faster.

Coordinate Complex Business Model Requirements

Marketplaces and software platforms need to split incoming payments between multiple parties, take their commission and sometimes hold funds in escrow. Traditional setups struggle to support this because the gateway can’t directly communicate with separate merchant accounts for every seller.

Unified payment platforms are designed for these multi-party flows. They create sub-merchant records under your master account, run automated Know Your Customer (KYC) checks and distribute funds to sellers as soon as transactions clear.

Settlement timing, reserve requirements and payout currency follow your rules rather than the limitations of separate banking contracts. With payment data and funds managed in the same system, you avoid manual spreadsheets and reduce payout errors.

Unify Payment Method Coverage Across Account Types

Different payment methods typically require separate banking arrangements—cards through one acquirer, bank transfers through another, local wallets through a third. This creates technical complexity and inconsistent checkout experiences.

Unified platforms integrate merchant account management with a gateway that already supports cards, wallets, bank transfers and popular local methods in each region.

For example, when customers in India choose UPI or UK buyers prefer a specific wallet, the transaction still goes through the same API and lands in the same merchant account. You eliminate payment-method-specific suppliers, reduce integration work and let customers pay with their preferred method, no matter where they shop.