what is merchant account and payment gateway?

When a business wants to accept credit card through its website, it must have two services:

1. A Merchant Account
2. A “Payment Gateway”

A merchant account handles the financial processing of the credit card transaction with the banks and card brand (VISA, MasterCard, etc).  A “payment gateway” provides the technology to securely capture and transfer the credit card information from a website shopping cart to the merchant account.  Authorize.net is a payment gateway provider, so all that they do is supply technology to capture and transfer credit card transactions to compatible merchant account providers.