Skip to content

Accept Credit Card Payments without a Merchant Account

Written by

Last editedMar 20232 min read

There are a variety of e-commerce solutions which allow companies to carry out transactions using credit cards without having a merchant account. The best known of these solutions are Paypal and Square, but there are several other good alternatives as well.

As a seller wishing to conduct online sales without a merchant account, rest assured this is certainly a possibility. In this post we’ll take you through why you might opt to forgo a merchant account in favour of other options, as well as taking you through a detailed guide to accepting credit card payments without a merchant account.

What are merchant accounts?

At its most basic, a merchant account is essentially a specialised bank account which businesses use to accept payments via debit or credit card.

When it comes to accepting credit card payments, however, it becomes slightly more complicated. When a customer makes a payment to a business by credit card, a credit card processor will send the transaction to what’s called the credit card interchange. From there, it is routed to the customer’s issuing bank for approval. Once approved, the money will be deposited into the business’ merchant account. Finally, the funds will be transferred from the merchant account to a business account.

How to collect payments with GoCardless


Create your free GoCardless account, access your user-friendly payments dashboard & connect your accounting software (if you use one).


Easily set up & schedule one-off or recurring payments via payment pages on your website checkout or secure payment links.


From now on you'll get paid on time, every time, as GoCardless automatically collects payment on the scheduled date. Simple.

Get started in minutesLearn more

Drawbacks of merchant accounts

As this is a rather convoluted process, there are several issues involved in using a merchant account for credit card payments.

Firstly, in order for a bank to take the risk of offering you this solution, they may opt to underwrite the account. They may also refuse to issue one if you have a poor credit history.

Secondly, there are a number of fees involved in using a merchant account. These usually include application fees, setup fees, transaction fees and currency conversion fees in the case that you are receiving payments internationally.

Thirdly, using merchant accounts can result in delays in receiving the funds in your business account. As you are dependent on credit card companies' processing times, the duration of time it takes for the money to arrive in your account is out of your hands.

For all of these reasons and more, many businesses look for ways to accept payments online without having a merchant account.

Accepting online credit card payments with PayPal

Paypal was one of the first companies to allow businesses to accept credit card payments without a merchant account and is still one of the most famous today.

Paypal transaction fees can be found on their website, but typically start at 2.9% standard fee per transaction.

Accepting online credit card payments with Square

Square offers several tools for accepting credit card payments without a merchant account in the UK. Included in their application programming interfaces (APIs) are options for businesses to create and tailor their checkout and payment process to their online storefront. There are options to accept credit card payments over the interface. The transaction fees on Square vary, but typically online checkouts result in a 2.5% fee on each transaction.

Making online payments with GoCardless

UK business owners and developers can sign up with GoCardless as a sole trader and hold a bank account either in their own name or a trading name.

The GoCardless bank-to-bank payments solution enables payments to be collected on time and with reduced costs, by bypassing the cards system.

Signing up with GoCardless allows business owners to collect payments and transfer them to either personal accounts or business accounts with ease (subject to passing regulatory checks).

Another plus to signing up is that there are no commitments. Signing up just means that you create an account to try it out, and you can stop using it whenever you wish without incurring any fees.

We can help

GoCardless helps you automate payment collection, cutting down on the amount of admin your team needs to deal with when chasing invoices. Find out how GoCardless can help you with ad hoc payments or recurring payments.

Over 85,000 businesses use GoCardless to get paid on time. Learn more about how you can improve payment processing at your business today.

Get StartedLearn More
Interested in automating the way you get paid? GoCardless can help
Interested in automating the way you get paid? GoCardless can help

Interested in automating the way you get paid? GoCardless can help

Contact sales

Try a better way to collect payments, with GoCardless. It's free to get started.

Try a better way to collect payments

Learn moreSign up