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How to Accept Payments Online

Do you need a merchant account to accept credit cards online? Probably not. Here's what you need to know about merchant accounts and the alternative.

3 min read

There are a variety of ways a business can accept payments online. While a merchant account is a common method of online payment processing, it's not the only way. In this blog, we’ll take a look at how merchant accounts work and an alternative that exists for businesses with storefronts.


Do I Need a Merchant Account to Accept Payments Online? 

A merchant account coupled with a payment gateway is the most common way of enabling online payments. A merchant account is a specially designated bank account that allows you to accept credit card payments. A payment gateway facilitates the transaction between the merchant, customer, and their respective banks. 

However, you do not need a merchant account to accept payments online. In fact, merchant accounts can be a hassle to set up, especially if you’re a small business with limited wares. In addition, if you have a merchant account and a payment gateway, you typically have to pay fees for both.

accept payments online


Accept Payments Online Without a Merchant Account

You may need a payment gateway in order for your merchant account to work, but you don’t need a merchant account for your payment gateway to work. Some providers offer an “all-in-one” solution that are generally faster and easier to sign up for. Many of these have some form of mobile credit card processing capability as well, allowing customers to pay through phone and/or owners to accept payments through phone.

We’ll call this type of provider a payment service provider, as opposed to the standard merchant account providers (described above) that provide merchant accounts. Payment service providers are also known as payment facilitators or third-party processors. These providers don’t offer a merchant account; instead, your account is included in their system. 

In other words, they’re an all-in-one solution that allows you to accept payments online and integrate seamlessly with your in-store checkout. 

How to Accept Payments Online

Benefits of Payment Facilitators 

What would an in-store transaction with a payment facilitator look like? 

  • A customer decides to make a purchase from you (congrats!) 
  • They provide their card
  • You enter their payment details

It really can be that easy. With a third-party processor, you enjoy several benefits: 

Seamless Sign-up. The process of signing up for a merchant account can be time-consuming since you have to collect documentation. And unless you’re a well-established business, you are much more likely to be declined. 

Minimize Fees. There are usually no setup or maintenance fees involved with a payment facilitator. A merchant account has all kinds of additional costs, like security charges, a PCI-compliance charge, different fees for different card types, and so forth. 

Customer Service. Your interactions with a bank merchant account are bound to be impersonal; they’ve got bigger fish to fry. Choosing a third-party processor ensures the experience is a little more human. You’ll have an easier time reaching out to an account manager should you run into any issues.

Integrate With Your Website. Some payment gateways function online and off. That is to say, the same system that you use for transactions in your store is the same system you use to accept payments online (e.g., integrated into your appointment calendar so people can book and pay directly from your site). 

As you research potential payment processing solutions for your business, download our fact sheet "What Is Payment Processing?" At a glance, you can understand the fundamentals of payment processing and all the parties involved. 

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Download This Fact Sheet

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