compare merchant accounts A true merchant account is just that, a "true" merchant account. You, the merchant, apply with a processing bank, usually through a sales agent, to have the right to have a merchant account dedicated solely to your business. The merchant account is for your business alone and you are responsible for it in every way. You will also be responsible for providing a gateway as it is not included with the merchant account (some processing companies or sales agents will have one bundled with their merchant account but technically they are separate and you are usually free to use your gateway of choice). Basically, your merchant account is direct with Visa and MasterCard (and American Express and Discover Card if you choose to accept their members' cards) and you must abide by their rules. A third party processor allows your business, or even you as an individual, to use their merchant account to accept credit card payments. You apply with the third party processor and they make the decision based on their own set of criteria as to whether or not you will be allowed to use their services. The third party processor's bank doesn't even know you exist. A form of a payment gateway is automatically included as you must process all sales through their system. The third party processor holds all of the cards as they make all of the rules that you must obey. They are held responsible for the merchant they are allowing you to share through them and they hold you responsible for how your transactions affect it.