I'm investigating option to use chargify.com service for recurring payments. They state that i need both merchant account and payment gateway account. But then some websites says that paypal is both merchant account and payment gateway. Does it mean that to use chargify i can have only paypal busniness account without separate merchant account?
If you're going to take payments of any kind you need some sort of merchant account. Over the years things have gotten a little bit easier to work with.
It used to be that you had to have separate companies/accounts setup: 1 would act as your merchant processor and the other would be your gateway. Both carried their own set of fees.
As these merchant companies were competing with each other they began offering their own gateway services so that their users wouldn't have to get that from a 3rd party. Now they pretty much all do it.
PayPal, PayLeap, Group ISO, Optimal Payments, Stripe, Intuit, etc. are all merchant service providers that offer their own gateway solution.
Having a gateway specific to a merchant provider is great, but there are some disadvantages. For example, if you get one gateway integrated nicely into your website but then you decide you want to change merchant account providers for any reason you'll have to re-integrate everything you've done on your website with that new provider.
This can be avoided by using providers that are still compatible with popular gateway services. PayFlow and Authorize.Net are the most popular ones. PayFlow was actually acquired by PayPal a while back so they can provide their merchant services on the PayFlow gateway...a very popular gateway that works with many other providers...and still offer you the all-in-one solution.
Both PayFlow and Authorize.net are compatible with lots of merchant providers, so if you feel like you might want to switch at some point it may be wise to stick to one of those gateways.
All of that said, I would recommend you go with PayPal. They have all sorts of payment features outside of direct credit cards, and if you want direct credit card processing they can offer that, too, on their PayFlow gateway (or their own API that they call DoDirectPayment).
I hope that helps more than it confuses.