Bank Hosted means that, after ‘checking out’ of your website, purchasers are re-directed to a secure page hosted by the payment gateway to submit their credit card details. Then, following an approved or declined message is displayed, the purchaser is returned to a checkout page on your website. Bank Hosted mode is sometimes also referred to as Server Hosted mode.
Merchant Hosted means that your website has a SSL secure page for the purchaser to enter their credit card details into. Credit Card details are then transmitted to the payment gateway in the background via a secure, encrypted connection. If you choose to implement in this mode, you need to adopt appropriate card security measures including firewall and intruder detection software, regular scanning for viruses and worms, and you must ensure that your website does not store full credit card details.