An online payment processor collects payments from customers for you. They can hold the funds in your account with them and send the funds to your bank account. They will take a small fee for their services. A popular payment processor is PayPal, but there are many others. Simply put, an online payment processor is a service that enables you to pay, send money, and accept payments.
A merchant account allows a business to accept credit card and debit card payments, along with other types of electronic payments. A merchant account is also linked with a payment processor that manages the processing when customers pay for goods and/or services.
A merchant account usually requires an agreement between the merchant and the acquiring bank (the financial institution that processes the credit and debit card payments for the merchant) and any other parties involved in processing payments such as a payment processor, an independent sales organization (ISO), and/or a member service provider (MSP).