The two pieces
A merchant account is the acquiring service that actually processes card transactions and settles funds to your bank. A payment gateway is the software that securely transmits card data from your website or checkout to the acquirer.
Both are required for online payments. In-person payments only need a merchant account plus a physical terminal.
Bundled vs separate
Providers like Stripe, Adyen and Shopify Payments bundle both into one product. Traditional acquirers (Worldpay, Barclaycard, Elavon) can be paired with third-party gateways (Opayo, Braintree, Cybersource).
Cost implications
Bundled tends to be simpler and often cheaper at small to mid volumes. Separating acquirer and gateway can be cheaper at large volumes because you can negotiate each independently.
Typical gateway costs when separate: £10-£25/month plus 1p-3p per transaction. Bundled providers roll this into the headline rate.
What each does technically
The gateway: tokenises the card, runs fraud rules, handles 3-D Secure and passes the authorisation request to the acquirer. The acquirer: routes the request to the card scheme, handles funds settlement, manages disputes and issues statements.
Key takeaways
- Merchant account = processes the payment. Gateway = transmits the card data.
- Bundled products are simpler; separate stacks give more negotiating leverage.
- Volume typically decides which model is cheaper.
- Both pieces are compulsory for online - in-person only needs the acquirer.
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