How to accept credit card payments without a merchant account

How to Accept Credit Card Payments Without a Merchant Account

Is it possible to get credit card payments without necessarily having a merchant account? Yes, it is possible. Today you don’t need a merchant account to accept payment online, thanks to third party payment gateways for making this possible. But before we see how that is possible, let’s go through some basics about a merchant account.

What is a merchant account?


In simple terms, a merchant account is a type of bank account that allows you, the merchant, to accept credit card payments online.

How does it work?

Here is what happens:

  • Customers buy products and services on your websites.
  • Your credit card processor sends the transaction to the credit card network.
  • The credit card network then routes it to the client’s issuing bank (your customer’s bank) for authorization. The payment information can be denied.
  • Once approved, the transaction funds are transferred into your merchant account.
  • Once the money is in your merchant account, the credit card processor then moves the money to your business account.
  • You can then use your money once in your business account.

Note that it takes a few seconds for the first four steps to be complete. The fifth stage roughly takes 2- 14 days to be complete. That means you may have to wait for up to 14 days to use your money. That long wait period (of up to 14 days) explains why some people today are preferring other ways to accept credit card payments.

What do you need to get a merchant account?

merchant account

If you were to open one today, be prepared to provide the following documents:

  • Local documents as per company jurisdiction which shows company owners and directors
  • Certificate of incumbency
  • Certificate of Incorporation
  • Valid ID copies for all company owners and directors
  • Bank statement/Utility bill/Rental agreement under corporate names proving company location
  • You will also be required to adhere to some website requirements. For example, create a privacy page or terms and conditions page. If you don’t, your application will not be successful.

How to accept credit card payments without a merchant account

As we have mentioned above, the long wait period to access and use money is pushing some people to consider other ways of accepting credit card payments. The time-consuming application process involved in getting a merchant account is the other thing fueling merchants to search for other convenient ways. Basically, more time is needed to go through the paper difficulties before getting a merchant account.

Use an intermediary

The best alternative to owning a merchant account is using an intermediary (payment aggregator). A payment aggregator, also known as a payment service provider, allows you, the merchant, to process debit and credit card payments without setting up a merchant account. A payment service provider facilitates quick money transfer making it possible to work with cash on delivery.

What to consider when choosing a payment aggregator?

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  • Security

Security must always remain a top priority if you want to stay in business. That means settling for a payment system that provides the vital levels of protection, including encryption of financial information on the web and instant authorization of the client.

  • Customer support

Can you reach the support team any time you need support? Does the provider offer quick fixes? How can you contact the support team? By phone, email, or live chat?

  • Payment flexibility

Does the provider have a transparent payment policy? Does the provider provide financial statements? These are some of the questions that need to be answered before making a decision.

  • The limitation on the maximum amount of card payment

Best payment aggregators update their clients on any limitation.

  • Interface

Is the interface of your account convenient? A sophisticated interface will make things challenging for you and your customers.

Best payment aggregators

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Here are six payment aggregators you can count on:


It is easy to get started in PayPal. Just sign up for free, and once you provide the required details (debit or credit card and your bank account), you are ready to process payment. No annual membership fee or processing fees when you create an account with PayPal.

Why use PayPal

  • It is free: No annual membership or hidden fees.
  • Credit card security: Your information is always protected.
  • Flexibility: Possible to have several bank accounts as well as credit and debit cards linked to them.
  • Instant international transactions: You can receive or send money instantly in almost any country across the globe.


Suitable for small businesses. Charge minimal fees, effortless to sign up, and turn your smartphone or tablet into a cash register. Additionally, Square allows you to accept both chip cards and NFC payments for contactless or traditional operations with chips and pin codes. It allows you to access your money the following day after the payment.


It is easy to tailored Stripe to your needs. Has no monthly fees or hidden costs, has a powerful API, and easy to integrate with many other applications. This platform gives you enough reasons why you don’t need a merchant account.

Other includes

  • Apple Pay
  • Skrill
  • Google Wallet

Why are businesses shifting to payment aggregators?


  • Sign up process

The entire process of signing up and receiving payments from a payment aggregator is fast compared to a merchant account. To sign up and start using a merchant account, you have to go through a detailed and lengthy process which many business owners are not happy about.

  • An all-inclusive platform

Payment aggregators provide a platform you can use to pick the solutions your business needs. For example, if you opt to use Square, you can choose from these options: Square Payments, Square Point of Sale, Square Virtual Terminal, and Square Invoicing.

Free sign up for an account plus no monthly or annual fee.

  • Low fees

Payment aggregators charge low fees compared to those charges by merchant account providers. Besides, the fees they charge are much more transparent—no hidden costs.

Downsides of working with payment aggregators

There are some downsides to working with payment service providers. The major disadvantages include:

  • Account holds and termination

Payment aggregators reserve the risk to monitor your account and terminate it anytime they deem it too risky. In other words, your services can be interrupted at any time.

  • Customer support

Many businesses have reported that payment aggregators are not that helpful in situations regarding account closures or freezes. So prepare for a rough experience in case your account is frozen or terminated. Merchant account providers are known to offer better customer support.


As you can see, it is possible to accept payment online without a merchant account today. So if not in a position to open a merchant account, consider the above platforms. Need more support to accept credit card payment without a merchant account? Let us know!