This past week our top support questions was, “What is a merchant account and payment gateway and how do they work with Chargify?”  This is a great question and it is important for Chargify customers to understand what they are and how they work together with Chargify.

What is a merchant account?

A merchant account is a type of bank account that enables businesses to accept payment by debit or credit cards.  A merchant account is necessary because it’s what allows you to accept recurring credit card payments from your customers. Before you can even begin using Chargify, you will need to set up a merchant account. (You can, however, test Chargify without having a live merchant account/payment gateway with the free Chargify developer plan.)

What is a payment gateway?

In order to get paid, you will need a payment gateway.  A payment gateway facilitates the secure transfer of information between your website and your merchant account.  Your payment gateway will transmit your customers’ billing information to your merchant bank so that payments can be deposited into your internet merchant account each month.

How do they work with Chargify?

Explaining how a merchant account and payment gateway work together with Chargify can be complicated.  In short, your merchant account and payment gateway work together to allow you to process credit card transactions and collect the money in your bank account.  Chargify builds upon these systems to add a new layer of functionality (ex: dunning, billing intelligence, subscription management) and all of these systems work together to form your recurring billing platform.

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