Do you need to capture credit cards or charge your reservations upon booking? This article walks you through the difference's between payment gateways and payment processors and some common misconceptions with both.
What is a payment processor?
A payment processor is a merchant service often referred to as a Payment Processor that executes a credit card transaction by transmitting data between your customer or guest, the merchant issuing bank (i.e., the bank that issued your customer’s credit card); and the acquiring bank (i.e., your bank). The payment processor also typically provides the credit card machines and other equipment you use to accept credit card payments. To accept credit cards payments through the CellarPass system, whether that's for ticketing* or reservations, you must setup a merchant account with a merchant services provider (also known as a Payment Processor).
*For ticketing only, you have the option of utilizing the CellarPass payment processor or Stripe Payments.
What is a payment gateway?
A payment gateway is a piece of software provided to you by your payment processor specifically for processing online credit card transactions. CellarPass uses this service to securely submit the guest's credit card to the processor to facilitate the online payment transaction. It also authorizes payments for card-not-present transactions (CNP), for online environments such as Reservations, eCommerce websites. Think of it as an online point-of-sale terminal for your business.
The difference is a payment processor facilitates the transaction and a payment gateway is a tool that communicates the approval or decline for online transactions between you and your customers. If you are collecting credit card data online (Reservations, eCommerce) then you will need both a merchant services account (Payment Processor) and payment gateway. In many cases the merchant services provider uses their own branded payment gateway.
Can I use my Point of Sale payment processor for online credit card payments?
The short answer is no. Typically, the Merchant ID (MID) and Terminal ID (TID) provided to you by your payment processor for you Point of Sale only allows Card Present (CP) transactions where a credit card is physically in your retail location that is either swiped, dipped, or tapped from a card reader device (also known as a credit card reader). For online payments, your payment processor will need to issue you a separate account specifically for Card Not Present (CNP) transactions. If you wish to process credit card payments for your online reservations or eCommerce website you will need to contact your payment processor to request a Card Not Present (CNP) account in addition to what you already use for your Point of Sale. These types of accounts are not always provided to you by default, so check with your payment processor to find out which credit card processing accounts your business has.
Do I have to use the same payment processor for all of my systems?
While maintaining one relationship with a single provider can be attractive from the convenience aspect, it is not a requirement. However, depending on your system vendors your choice of payment processor providers may limited to just the one they have an exclusive agreement with. In many cases, your Point of Sale provider also manages your eCommerce site. In which case, your payment provider for your POS and eCommerce platforms might be the same. However, your Reservations system may offer or support different providers. There are benefits to using different payment processors across your various systems platforms. The main benefit of using different payment processors for your different transactional platforms is that transactions processed from each of these platforms are automatically isolated preventing any possible reporting confusion and/or co-mingling of funds. This makes the financial reports provided by each processor and/or gateway very clean for your accounting team.
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