Follow the money: How is money taken and processed online

Merchant Services

To take credit card information online you need a Payment Gateway and a Merchant Account with a Payment Processor. When installling and configuring your software, ICI will link your ecommerce pages to either your Merchant Account or your Payment Gateway. Sometimes a Payment Gateway will offer a merchant account. Regardless, these are two separate entities that make online payments happen.


You apply for Merchant Account through a Payment Processor, which grants you the ability to take credit card information online or offline.

A merchant account is the contract under which an acquiring bank extends a line of credit to a merchant, who wishes to accept payment card transactions of a particular card association brand. Without such a contract, one cannot accept payments by any of the major credit card brands. Applying for a merchant account is similar to a bank application. Please allow time for the process to take place.

A Payment Gateway is an online service that facilitates the transfer of information between a payment portal (such as a website, mobile phone or IVR service) and the payment processor.

Here is how it works: From your secure encrypted payment page, a customer’s sales information is sent encrypted to your Payment Gateway. The Payment Gateway determines whether the payment information is correct. If OK, the Payment Gateway sends the information to your Merchant Account who then deposits the money from the transaction directly to your bank account.

When choosing a Payment Gateway and Merchant Account, you are looking for the lowest transaction and processing fee as well as the how quickly the cash will get to you bank account.

Rates vary, but to give you some notion of the cost as well as the questions to ask:

Setup Fee: Free ~$100 – $500
License Fee: Free ~$199 – $1299
Application Fee: Free ~$50 – $295
Programming Fee: Free ~$50 – $295
Discount Rate: Free ~2.25% – 3.95%
Transaction Fee: $0.30 – $0.50
Statement Fee: Free ~$10.00 – $25.00
Customer Service Fee: Free ~$10.00 – $15.00
Internet Gateway Fee: Free ~$20.00 – $35.00
Check by Phone Software: $195.00 – $295.00
Check Recovery Service: $99.00 – $299.00
Credit Restrictions

Rates are negotiable based on type of industry and volume of sales.


To take payments on your website, your web page must integrate components of your online payment gateway. Paypal is easily configured to a web page, some of the others allow for more complicated configuration with your website ecommerce software and tracking based on your needs.

Popular Merchant Gateways

Looking for more information on this topic: Payment Gateway, Wikipedia >>

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