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How to Accept Payments Online Without a Merchant Account?

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Receiving digital payments unknowingly in today’s modern world has become an important part of an online business.

 

It may be an e-commerce shop, services, or even other forms of online business.

 

The idea of a merchant account is overwhelming to many businessmen and small entrepreneurs who may not be in the capacity to handle the same.

 

Thankfully, to accept payments online, you do not necessarily have to create a merchant account.

 

In this article, we’ll look at numerous ways to accept payments online without a merchant account, the differences between a merchant account and a company bank account, and the advantages of receiving such payments without one.

What is a Merchant Account?

Before getting into deep detail about how one can take online payments without having a merchant account, let’s define first what a merchant account is.

 

A merchant account is a type of bank account that allows a business to accept several types of card payments.

 

It acts like an intermediary between the seller business owner and the customer’s bank, enabling funds from card payments to get into the business’s bank.

 

While merchant accounts are great ways to accept online payments, they can be costly, entail so much paperwork, and are almost always subjected to an approval process.

 

This might be daunting for a starting business or those that are small.

 

Thankfully, there is an alternative option aside from a traditional merchant account.

Read about: Prepaid Card: Meaning, Types & Benefits

Methods to Accept Payments Online Without a Merchant Account

If you are a small business owner or a freelancer planning to receive credit cards and online payments without the headache of opening a merchant account, there are quite several alternatives.

 

Let’s look into some of the most popular options that promise relative viability.

  1. Payment Processors – PayPal, Stripe, and Square

Among the easiest ways to be able to receive online payments, especially if a merchant account is not involved, are online payment processors.

 

Such services enable the immediate processing of client transactions with much efficiency.

 

Quite well-established companies for that purpose are PayPal, Stripe, and Square.

 

PayPal

Probably the most well-known payment processor is PayPal, and online retailers and service providers who allow payment via the service are already in the millions.

 

With PayPal, even if you do not set up a merchant account, you will be allowed to receive customer payments through credit cards, debit cards, or PayPal balances.

 

Setup is fast and straightforward, and all you need to do is create a business account.

 

Stripe

Stripe is another popular payment processor, with an orientation for the more tech-savvy.

 

Since it easily can be integrated with an API, Stripe grants businesses the capability to receive direct payments via websites and/or mobile applications.

 

The strengths of Stripe shine with how incredibly simple and easy it is to use, and its overall usability also extends to comparatively lower transaction fees.

Read about: International Payment Fees | The Essential guide.

Square:

An omnichannel payment processor for both in-store and online allows you to set up an online business and take payments without requiring a merchant account.

 

Quite easy to use, it also offers a host of other business tools like invoicing and point-of-sale.

 

The company offers very competitive transactional fees, and you can take phone, tablet, and computer payments.

 

These payment processors have made receiving online payments quite smooth even sans having to operate a merchant account.

 

A user just creates an account with any of the service providers and integrates their payment gateways into his website, and he is ready to collect payments in minutes.

  1. Third-Party Payment Platforms (Shopify, Wix, etc.)

Well, if you run an e-commerce store, Shopify, Wix, and BigCommerce do have a default payment provided to you, which would eliminate the use of a separate merchant account for these services.

 

More importantly, they are integrated with features of payment processing without requiring you to create a merchant account themselves.

 

Shopify:

Shopify gives an online business an all-in-one smooth platform.

 

The moment one sets up an online store with Shopify, right away you will have Shopify Payments, its payment gateway to take credit card payments.

 

Shopify Payments are integrated with other payment methods such as Apple Pay and Google Pay.

 

You do not need to have any third-party merchant account to accept payments.

 

Wix:

Wix also includes an integrated payment solution for users of the website builder: one can leverage Wix Payments and accept all major credit and debit cards, with alternative ways to pay for goods and services that include systems like PayPal and Stripe.

 

Similar to Shopify, Wix does not make it compulsory to have a merchant account.

 

BigCommerce provides payment gateways integrated with third-party payment service providers like PayPal, Stripe, and Square.

 

It also allows you to handle credit card payments without a merchant account, and the supported payment gateways are compatible with foreign payment methods, making it ideal for worldwide enterprises.

 

With it, one would incur normal charges that would involve transactional charges, and most of the merchanting activities are not there.

 

They handle all the technical details of processing and receiving payments, which would highly be acceptable given an enterprise that has not got adequate resource support for the creation of a traditional kind of merchant account.

Read about: Top 7 Alternative Payment Methods in 2025.
  1. Peer to Peer Payment Services (Venmo, Zelle, CashApp)

Meanwhile, P2P systems continue to gain popularity among small entrepreneurs, freelancers, and anyone in need of an easy method of getting paid without opening any kind of merchant account.

 

Having the ability to send and receive money directly to your bank account makes these apps one of the easiest and most affordable methods for managing payments.

 

Venmo

It is a social-based way to send payments either to friends or businesses.

 

A lot of small businesses and freelancers use it since it’s super-easy to set up and does not require using a merchant account.

 

Venmo is proprietary and owned by PayPal.

 

Zelle:

This also involves a peer-to-peer system linked directly to the bank account. It often comes integrated within banks’ applications.

 

This service could be a great deal of convenience for your customers in case they would normally send payments through this channel.

 

This will enable the business to receive funds directly into the checking accounts without landing in intermediate merchant accounts.

 

Cash App:

This is one more place from where the business can get paid or pay anyone, as many other peer-to-peer services allow, using the QR code, email, and phone number.

 

It is quick, easy, and does not have any merchant account set-up hassles, either. If you desire more features, the Cash App also includes a debit card and a business account.

 

As great as these alternatives are for a small transaction, they do have certain scalability and fee issues.

 

Generally, these services will be more appropriate for businesses that have fewer and smaller transactions or anyone who’s still getting started.

Read about: Best Neobank for Business Transactions in 2025.

 Merchant Account vs. Business Bank Account

With each of the terms being something different yet together in their operability, function, and general practice here’s how these match up against each other.

 

Merchant Account:

A merchant account is an account made just for credit card processing and other electronic forms of payment processing.

 

It will allow your business to take the customers’ payments and put that money into the bank business account.

 

Generally, there are some general fees for merchant accounts, that have to be opened after some form of approval and are handled in some form of contractual basis between you and one selling these services.

 

Business Checking Account:

This account is the general account for your business where any money from your business will be kept.

 

It helps you receive the amount that was paid to you due to a business account but by default, it includes no such facilities like credit card payment processing and other electronic collections.

 

Normally, you would need to open a third-party payment provider or gateway to accept electronic payments.

 

The primary difference is that a business bank account is largely for managing your company’s money, but a merchant account is expressly built to handle payment processing.

Benefits of Accepting Payments Without a Merchant Account

Now that we’ve covered the many methods for accepting payments online without a merchant account, let’s look at the advantages:

  1. Lower Costs

The benefits are in terms of cost saving.

 

Most merchant accounts usually have setup fees, monthly maintenance fees, and transaction fees; all these make the account a bit costly.

 

Most of these costs are avoided while using a payment processor like PayPal or Square, especially for a small business that may not want advanced features accompanying a traditional merchant account.

  1. Quick Setup

The merchant account could take several weeks to set up and will usually require heaps of paperwork, credit checks, and collateral.

 

In comparison, your merchant with PayPal or Stripe will be able to take payments in hours, with minimal setup and no credit checks.

  1. Flexibility

With the help of services such as PayPal and Venmo, one can receive money from customers all across the world without having a merchant account.

 

Most of the payment gateways support a multitude of currencies and many different ways of paying for goods, giving more flexibility in the way one receives money.

  1. No Long-Term Contracts

With a merchant account, you typically need to commit to long-term contracts with banks or processors, binding you to that contract with rigid terms.

 

Using services like PayPal or Square allows pay-as-you-go options; there are no long-term commitments you must enter.

  1. Security

Security around the processing of your transactions – the sensitive data is kept encrypted and stored securely by the payment processor.

 

The services will also be compliant with a set of industry standards, such as PCI-DSS, thereby allowing your business to safely accept payments without having to deal with much of the complexities surrounding fraud prevention and protection of data.

Conclusion

You will not be required to set up a traditional merchant account to receive online payments.

 

Mixtures of processors and third-party platforms, better known as P2P services, have proven quite conducive to securely receiving a variety of payments with ease.

 

Options abound without having the intricacy or expense actually for setting up such an account through various services like PayPal, Stripe, and Square.

 

This will be of great use to small businesses, startups, and freelancers in smoothing their way of getting money without the painful and expensive process of setting up a merchant account.

 

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