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 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.

Merchant Accounts & Payment Gateways

We reach a lot of small businesses and software developers who’ve never needed to know anything about merchant accounts and payment gateways, so I wrote up a personal blog entry a few weeks ago that explains most of what you need to know - from what the pieces do to where to get them.

If you’d like to learn more about merchant accounts and payment gateways, in general, please check out Merchant Accounts & Payment Gateways… Keeping the Grass Green!.

Why We Removed PayPal WPP

Back in April, were excited to add support for PayPal Website Payments Pro (“WPP”) for Chargify merchants in the US, UK, and Canada. WPP provides an additional and in some ways easier path for startups and small businesses to get a payment gateway and merchant account in one package.

Since we entered private beta, one of the most requested features has been PayPal merchant services support. PayPal’s Website Payments products ease the pain of finding a gateway and merchant account, making it simple to start charging customer cards.

This week, we introduced support for PayPal Website Payments Pro in the United States. Next week, we will add support for PayPal accounts in Canada and the United Kingdom. We also plan to support PayPal Payflow Pro in the near future.

Welcome to the Bullring, the blog dedicated entirely to empowering entrepreneurs and developers to start and run successful businesses based on recurring revenue models. 

Let’s lay it out there. Recurring billing is a pain in the ass. Credit cards get declined for a million different reasons, you have to deal with upgrades/downgrades, proration, refunds, credits, customer communication, fraudulent transactions, and the list goes on. It’s no small task to implement a system that handles all of the potential pitfalls of billing on a recurring basis.