Difference Between Payment Gateway & Payment Facilitator and Merchant Account

Why business is running? It is running for profitability! A company offers service/product and customers pay to consume them. This is how it goes on. But, when it comes to e-commerce business, accepting payments from the customer is a very important element. The more important it is, it should be the simplest too. Here we are discussing different payment cycles such as payment gatewayUK and payment facilitator. There is a difference between them. Let us try and understand.

Before we start to understand the difference between these terms, let us have a look at some important parties that are involved in the payment transaction.

1.        Business that accepts card payments [the merchant]
2.        Buyer under whose bank account a card has been issued [the cardholder]
3.       Bank that has issued your customer’s credit card [the issuing bank]
4.       Bank that processes the customer’s credit card payments for the merchant [the acquiring bank]

Starting with a payment facilitator UK, it is also and generally known as ‘PayFac’. It is a third-party payment services provider (PSP) for merchants. Typically, a payment facilitator has a contract with the acquiring bank and onboards merchants on a sub-merchant platform.

Whereas a payment gateway UK is service that helps merchants accept payments online, which is essentially any payment method other than cash or cheque. A customer/buyer presents a card or digital wallet to pay for goods or services. The payment goes through a gateway which links the customer’s bank or card brand to the merchant account so funds can be transferred between these accounts.

Importance of Gateway

The significant role of a gateway is that it verifies customers’ account information to either successfully process or decline transactions. It becomes important for businesses to have a secured, safe and reliable payment gateway as it is responsible to transmit such sensitive personal information (of customers/ buyers). It needs to be highly secure and capable of fending off attempts to steal valuable information.

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