Blog  /  Платежи  /  How to accept credit card payments without a merchant account?
Contactless payments explained

How to accept credit card payments without a merchant account?

With the vast number of payment processing methods available, companies increasingly tend to find ways to accept credit card payments. In relation to that, a growing number of companies help to set up payment processing on websites in the most optimal way. Thus, it is important for any business industry to correctly define a payment model and select a payment service provider that can cover all potential customers.

Accepting credit cards as payments can be a daunting task. It is especially true for startups or companies with bad credit history. Most modern payment systems will either not work with you, or charge high fees to cover possible risks.

However, credit card payments on the website can be accepted without using a merchant account. Financial companies such as third party payment providers, payment aggregators, payment facilitators solve this issue. Such organizations allow online business owners to process credit card transactions without a merchant account.

Despite the fact that working with merchant account providers has many advantages, there are times when it is not possible to get a merchant bank account.

Accepting credit card payments without a merchant account. What to consider?

Almost any business has the ability to accept credit card payments without a merchant account. However, for a better understanding of how to properly organize work, let’s first figure out what a merchant account is generally needed for:

  1. After the client has chosen the product and is going to pay for it, it is necessary to enter the card details in the payment page’s inputs.
  2. The payment gateway audits the transaction for fraud and transmits the information to the bank, which, in turn, informs the payment system about the transaction.
  3. Next, the issuing bank validates a credit card for the availability of the required amount for debiting and the card expiration date. After confirmation, the information flows to the acquiring bank.
  4. After approval, the required amount is transmitted to the merchant account and both client and a merchant receive information about the completion of the operation.

As we can see, merchant account plays an important role in the payment process. So how can you accept credit card payments without a merchant account?

As we defined above, a merchant account is a prerequisite for accepting payments online. However, instead of opening a merchant account, you can cooperate with a third-party payment provider such as PayOp. These companies have a built-in merchant account to which they accept customer payments on behalf of merchants. After a short validation process, funds can be withdrawn to a personal bank account.

Benefits of using third-party payment service providers over merchant account providers.

Let’s identify the reasons why business owners choose to work with third-party payment service providers instead of registering for a merchant account.

  • One of the important reasons is the registration process. When working with third-party payment providers, integration is usually much faster and easier compared to a merchant account provider. It is possible since the underwriting procedure is much easier than opening a separate merchant account. Since the payment service provider works with a large number of customers having one merchant account, merchants can be integrated much faster by providing them their own merchant ids.
  • Another advantage of accepting credit card payments without a merchant account, i.e. using a payment service provider, is that payment service providers usually offer a platform with a set of solutions. For example, if you work with PayOp, you can easily customize the payment page. With a few clicks, you can add payment methods suitable for the selected audience or region.
  • In addition, working with PayOp, your site will be PCI DSS compliant and have all the necessary protection against online fraud. However, no additional fee will be charged.
  • Another benefit of working with third-party payment service providers is fees. These companies only charge transaction fees. At the same time, the commissions of such companies are smaller and more transparent. Since you get a ready-made payment solution, you do not need to pay for integration, PCI DSS compliance, monthly fees, etc. As a rule, such companies have a clear and affordable pricing policy.

However, working with a payment service provider to accept credit card payments without a merchant account also has its drawbacks.

Overall, the biggest disadvantage that payment service providers can have is that you are more likely to experience delayed payments or account blocked. While you may find it much easier to get a payment platform for a website, the provider reserves the right to verify your account and take action if the organization deems your business too risky. As such, one of the biggest dangers from providers like Stripe or Square is account termination and account blocking. It should be understood that when working with merchant account providers directly, in case of suspicious activity, your account may also be blocked. However, in this case, there is a high probability that you will be blacklisted and other banks will refuse to cooperate with you in the future.

Also, not all companies have competent technical support specialists who could promptly solve emerging problems.

The bottom line

Choosing a payment solution is key to business processes. Therefore, it is also important to be able to accept credit card payments without a merchant account.

As mentioned, by working with a payment service provider, not a merchant account provider, you can get all the tools you need to accept payments. You do not need to apply for a merchant account separately.

However, not all payment providers are optimal. It is important to know the criteria for choosing a payment service provider and be able to apply them properly. In this case, you will not get confused in the variety of financial organizations and will be able to choose a solution that will be optimal for your business.

Top 5 high-risk payment gateways comparison
Stay up-to-date
Get our news earlier than others