How to accept card payments without a merchant account

Small businesses can accept online and in-person card payments without a dedicated merchant account by using payment service providers (PSPs) like Square, Stripe, or PayPal, which offer ready-made payment infrastructure

But while this is the traditional way to take payments, it isn’t the only way to accept payments online today, thanks to all-in-one solutions that handle much of the setup and management on their behalf.

Unlike a traditional merchant account, payment facilitators allow businesses to accept payments without setting up their own dedicated merchant account. Instead, they provide a ready-made payment infrastructure that handles payment processing, security, and fund transfers.

In this article, we’ll guide you through the steps of taking card payments for small businesses without a merchant account, what costs are involved, and the pros and cons to help you choose the best payment solution for your business.

How to take payments without a merchant account

Small businesses can accept card payments without a merchant account by registering with payment service providers (PSPs) such as SumUp, PayPal, Square and Stripe.

While the exact steps vary depending on the provider you choose, here’s what the process typically looks like:

1. Create an account and provide your business details

To take payments without a merchant account, register for a business account with a payment service provider using your business email and commercial details.

Next, you’ll need to provide your business details. You may be asked for:

• Your name and contact details
• Your business name
• Business address
• Type of business and what you sell
• Company registration details if you’re a registered business

2. Verify your identity and add your bank account

To comply with financial regulations, providers usually require:

• A government-issued photo ID
• Your date of birth
• Proof of address (in some cases)

Link your business bank account for payouts; providers may require a small micro-deposit verification before transferring funds.

3. Start accepting payments

Once approved, you can use your account to start taking payments from customers, including:

• Accepting online card payments through a website checkout page
• Sending payment links by email or text
• Creating invoices that customers can pay online
• Accepting in-person payments through a compatible card reader (if offered)

Note: Standard payout times for popular PSPs are usually 1-3 business days, but you can also get instant payouts for a fee.

How much does taking card payments for small businesses cost without a merchant account?

Credit card processing fees for small businesses without a merchant account typically range from 1.4% to 2.5% plus fixed per-transaction fees (around 20p–30p) for UK cards, though this ultimately depends on the provider you choose.

They also differ for in-store and online payments. For example, Square charges 1.4% + 25p online (more for non-UK cards) and 1.75% for in-store transactions. However, if you were to go for a payment processor specific to online payments – such as Stripe – fees can be lower.

You can compare payment providers that don’t require a merchant account in the table below. To give you an idea of how much it’ll cost your business, we’ve outlined how much you would pay in fees for each £1,000 spent.

Choosing the right payment solution

Taking payments without a merchant account is easier than ever before. Payment facilitators like Stripe, Square, and PayPal handle PCI compliance, security, and technical setup, eliminating the administrative overhead of dedicated merchant accounts.

While this usually comes with slightly higher transaction fees compared to a traditional merchant account, the trade-off is less administrative hassle, faster setup, and fewer upfront costs.

As your sales volume grows, it may be worth reassessing whether a payment facilitator is still the most cost-effective option. Many businesses consider moving from a PSP to a dedicated merchant account once they are processing higher monthly volumes, as the lower transaction rates available through negotiated merchant accounts can offset the additional setup and management involved.

When choosing the right provider, think about how you sell, the payment methods you need to support, and the fees that best fit your budget. Comparing your options before signing up can help you find a solution that is affordable and makes it as easy as possible for customers to pay.