Question 1

What is the difference between a payment gateway and a payment processor?

Accepted Answer

A payment gateway is the technology layer that transmits card data between your checkout and the payment network. A processor handles the actual movement of funds between the issuing bank and your account. Many modern platforms combine both in a single product, so the distinction matters less for most operators than it did a decade ago.

Question 2

How do I choose between flat-rate pricing and interchange-plus pricing?

Accepted Answer

Flat-rate pricing is simpler and predictable — one rate for all card types. Interchange-plus passes through the actual card network cost plus a fixed margin, which is usually cheaper at volume but requires understanding the underlying interchange rates. Most early-stage businesses start with flat rate and negotiate interchange-plus once monthly volume justifies it.

Question 3

What is dunning and why does it matter for SaaS?

Accepted Answer

Dunning is the process of automatically retrying failed recurring payments and communicating with customers about payment failures. A well-configured dunning sequence typically recovers 20–40% of failed charges that would otherwise become involuntary churn. The quality of retry logic and email sequences varies significantly between providers.

Question 4

Do I need a separate merchant account or does the platform handle it?

Accepted Answer

Aggregated platforms bundle merchant accounts across many businesses, which enables fast sign-up but can result in account holds or reserves for higher-risk businesses. A dedicated merchant account via a traditional acquirer takes longer to set up but provides more stability for established businesses with strong processing history.

Question 5

How should I think about fraud tools when choosing a payments provider?

Accepted Answer

Look at the rules engine — can you write custom fraud rules based on your customer patterns? Check 3D Secure implementation quality. And understand who absorbs liability for disputed transactions. If you are in a higher-risk category, these details matter more than the processing rate.

Question 6

What does accepting local payment methods actually involve?

Accepted Answer

Each local method — bank transfers, digital wallets, specific regional schemes — has its own settlement timeline, dispute process, and integration requirements. Adding a method is not just a configuration toggle; it affects your reconciliation, treasury, and support workflows. Evaluate the operational overhead, not just the technical availability.

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