Merchant Account vs Payment Gateway

Merchant account and payment gateway are two services that can get your business accepting bitcoin payments. However, they both provide different services and the choice of which to use is not always clear. Before we get into details about what these two services do, let's understand what bitcoin is.
Bitcoin is a peer-to-peer virtual currency system introduced in 2008 by Satoshi Nakamoto. It functions without an administrator or central repository, but rather has several rules that are built into the software which govern how much bitcoin is in circulation and when new bitcoins can be created. Bitcoins are made through a process known as mining, in which users run network nodes, verify transactions, and secure the Bitcoin network using specialized hardware.
Merchant Account
A merchant account is an essential service that enables your business to accept credit cards for e-commerce or phone orders. Using a third party like PayPal or Braintree you can sign up for a merchant account and select from a list of supported payment gateways. These third parties are responsible for creating a secure connection between your business, their servers and the consumer's credit card company in order to authorize credit card transactions.
The main advantage of working with one of these companies is that they have relationships with banks all over the world which allow them to provide international service. Another important advantage is that they handle customer and technical support and disputes, and provide fraud protection. You don't have to worry about these aspects of your business because it's all taken care of for you by the company.
A merchant account also allows you to create a database of customers who can make repeat orders with ease, without having to re-enter their credit card details.
However, a merchant account doesn't really work for a business that's looking to accept bitcoin, as it doesn't support digital currencies. Instead you'd need a payment gateway or point-of-sale system to process these transactions.
Merchant Account vs Payment Gateway
As you can see there are benefits and disadvantages to both a merchant account and payment gateway.
Merchant account – More expensive, more fraud protection options, better customer service, ability to handle repeat orders and easily create a database of customer information.
Payment Gateway – Cheaper option for smaller businesses, limited geographical coverage due to less agreements with banks around the world, transparent fees, no customer information attached to transactions.
So, if your business is looking to accept bitcoin as a payment method for individual orders you should consider getting a payment gateway service. However, if you're interested in accepting bitcoins as well as other currencies from around the world then it might be worthwhile going for a merchant account.
Merchant Account vs Payment Gateway: Conclusion
So, in a nutshell a merchant account is recommended if you want to accept bitcoins along with other digital currencies, while a payment gateway is good for accepting bitcoin only.