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what is the difference between merchant account and a payment gateway software?
A merchant account is an account, allowing a business to accept online payments (credit cards, debit cards, ACH transfers etc). In essence, it is a kind of an agreement between an acquiring bank and the merchant. By issuing a merchant account to a prospective merchant (applicant) the acquirer (acquiring bank) gives it a kind of a loan and assumes financial liability for the merchant account applicant, as well as risks, associated with potential consumer and merchant fraud, as well as chargebacks, refunds, ACH returns, etc.
Payment gateway software is a software product, whose primary function is to bring transaction data, sent by merchants, to the formats, required by processors, acquirers, and card networks, and ensure protection of cardholder data (in accordance to PCI requirements) while it is transferred between entities.