12.16.2021

How to Accept Credit Cards Without a Merchant Account

Written by Conal Yarwood-Frost

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Over the years, consumer habits have changed and card payments have slowly begun to surpass traditional cash payments. In 2020 alone, there were over 468 billion card transactions worldwide [1].

As a business owner, it’s up to you to make sure that you have the ability to meet your customers’ needs. While accepting credit card payments may seem like a no-brainer, it’s a little more complicated than it initially seems. This is especially the case if you don’t have a merchant account.


In this blog, we’ll give you an overview of what a merchant account is and give you an introduction to payment processing. We’ll also tell you how your business can accept credit cards without a merchant account.

A jumble of credit cards. Companies include Visa and Mastercard.

What is a merchant account?

In short, a merchant account is a dedicated bank account that holds card payments for you while they’re being processed. Once the payment is cleared, the merchant account then deposits the money into your business bank account. 

To open a merchant account, a business would traditionally enter into direct negotiation with an account provider or a bank of their choice. Depending on the terms of the contract, this negotiation could be months or even years long. 

Once a business has a merchant account, they can take all card transactions including online payments, in-person transactions and transfers. They will of course also have to invest in an POS system and the relevant hardware such as card machines and electronic tills.

Here’s a quick outline of how the process works:

  • Once your system accepts the card payment, the relevant card details are transferred to the merchant account 
  • While this is happening, the payment processor is contacting the customer’s issuing bank to validate the payment information
  • The customer’s bank will then accept or reject the payment. If accepted, the transaction is completed
  • The payment processor will then deduct any processing fees and deposit the money into the merchant account

Once upon a time, this was the only way a business could take credit card payments. Thanks to more modern processes, this is no longer the case. Many businesses have chosen to avoid the lengthy negotiations and fees that come with a merchant account. These businesses have decided to instead use a payment service provider.

Accepting credit card payments

If you don’t have the time, inclination or budget to negotiate a merchant account, there are still options available to you. As mentioned above, businesses that choose to operate without an account have the option of using a payment service provider. 

Payment service providers act as go-between for businesses, banks, and credit card companies. They operate in much the same way as a merchant account, in that they hold the money while a card transaction is being validated. This means that businesses without a merchant account can accept credit and open themselves up to a whole new batch of customers.

The easiest way to do all of this is to choose an POS system that acts as a payment service provider. There are many different companies that offer this service like Epos Now. The convenient part of choosing a company like Epos Now is that they will provide you with the hardware you need like card readers. We would advise you to be aware that some companies will charge you a transfer fee on credit card transactions. 

In the case of companies like Epos Now, we offer seamless integration with payment service providers. This means you not only get a complete suite of hardware and software but also the added benefits of being able to choose your own provider. 

Choosing the right POS system

Now that you know how to accept credit card payments, the next step is making sure your business is set up with an appropriate POS system. Electronic point of sale systems work as the backbone of retail businesses for a number of reasons. Designed to work as a complete business management system, you can control all vital aspects of your company from one cloud-based system.

Receive detailed analysis on the areas that matter to your business:

  • Filter sales reports by individual product, profit margin, trending items, or employee
  • Award-winning inventory management that syncs online sales and in-person sales for the most up-to-date stock levels
  • Create your own website or integrate with a fully loaded ecommerce platform
  • Automatic order purchasing for stock once it falls below a certain level
  • Customer management systems that save customer contact details and shopping preferences for more targeted marketing
  • Integrations with over 100 apps including marketing, accounting, bookkeeping, and loyalty program apps
  • Employee management for more efficient scheduling and payroll 

We let you choose the tools and insights to help your business achieve its goals. If you’d like to learn more about our software, request a free callback with one of our experts.


Get in touch today and see how we can help your business excel.

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