How to Accept Credit Card Payments without a Merchant Account

Small businesses can find it challenging to acquire a merchant account. It is because of the high set up fees that generally accompany the establishment process. Sometimes poor credit history can deny you the opportunity to get a merchant account. However, you will learn how to accept credit card payments without a merchant account later in this article.

Use of credit cards increases a business’s profits. You, as the business owner, can tap all potential customers. Some people prefer using a credit card instead of cash. Besides, using a credit card is more secure as you don’t have to walk around with money in your pocket.

When real credit cards got introduced in 1958, very many people wondered how it could be possible for a card to `carry’ money electronically? It was a mystery how one could use a card to buy goods and services. However, as the years went by, more and more people have embraced the use of credit cards from the root of it all, the United States of America to the entire world. Currently many people have the knowledge on how to transfer money using routing number and account number. Sending money is now easier as compared to earlier times.

What is a credit card?

Accept Credit Card Payments without a Merchant Account

What comes to mind when you hear the word credit card? A credit card is a payment card issued to people with money in their bank accounts. The owner gets a revolving account from the issuer. As the owner, you have to pay some fees for the card. Anytime you use the card to purchase goods at online shopping sites either locally or internationally.

The spent amount is deducted from your account and credited to the seller’s account. Credit card is a form of electronic money. Am sure you must have heard people talking about using credit cards to pay for goods. Most credit card owners like to use the pay by electronic check online shopping.

A credit card has the following features. On the front side, it has;

  • A hologram, 
  • Card number, 
  • Card network logo,
  • Expiration date, 
  • Issuing bank logo, 
  • Cardholder name,
  • EMV chip 
  • The contactless chip.

 On the backside of the card, there is;

  • A signature strip, 
  • A magnetic strip, 
  • Card security code.

Credit card issuers include Discover, MasterCard, Visa, and American Express.

Can I accept credit card payments without a merchant account?

The answer remains yes. It is possible to accept credit card payments without having a merchant account. If you are wondering how you can receive payments by use of credit cards and you have no merchant account, worry no more. Some third-party agents can help you process credit payments. You must part with some fee when using their services. 

The merchant processes all credit card payments and sends you your money on monthly payments after deducting the agreed charges. Besides, credit card issuers must also deduct their own charges.

A third-party merchant account is useful for businesses which want to avoid high set up fees for a merchant account. 

What are the advantages of using third-party merchant accounts?

Several benefits come with using third party merchant accounts. These include the following.

  • You do not incur the high set up fees of buying processing software and machines.
  • Third-party merchants don’t bother about your credit history.
  • You have maximized profits.

With all these benefits, your customers can send money with a credit card, and you can get good profits.

The main disadvantage of using a third party merchant account is the high fees generally charged by these third party merchants.

There exist several companies offering third-party merchant services. The most common ones include the following.

1. PayPal

PayPal is the most popular third – party merchant across the world. It has been accepting credit card payments for small businesses for some time now. It is an online service provider. You can use their website or their smartphone application to carry out transactions. Most people who like using electronic check during online shopping prefer PayPal. It is because it is easy, convenient, and secure. PayPal has a service they call PayPal Here that deals with offering third-party services.

2. PayByWeb

PayByWeb provides several different kinds of payment services. Apart from processing credit cards online, they allow you to do online shopping using electronic checks by use of phones. They also allow online payments and support international trade. The only short-coming with PayByWeb is that they only support transactions by using United States dollars only.

3. Square

Square is an online third-party merchant that supports online payments. You can have their application on your phone for a secure transaction. Again, you can electronically attach a small white square on your smartphone and be able to carry on operations with ease.

They also allow the use of credit cards where you can send money with checking account number to anywhere you may wish. As a business owner, you receive your payments every night after the day’s transactions from your customers.

4. Intuit GoPayment

Intuit GoPayment works by electronically attaching a grey bar on your android or apple phone. After the day’s transactions, the funds are transferred into your account every night.

5. Skrill

Skrill is one of the fastest-growing companies. They offer instant deposits and withdrawals. They are the best alternative to PayPal. They have small transaction fees that make them very favorable for small businesses. They support over 40 currencies of the world. If you don’t have a merchant account, then you can use Skrill.

They are ready to guide you through the whole process. One more exciting thing with Skrill is that they have a referral program. When you invite your friends to register with Skrill, you get 10% of the total amount of his or her transactions. Is that not incredible?

6. Stripe

Stripe is another efficient way a small business can utilize and get massive profits. Stripe has a flexible and powerful API that makes it easy to use. Linking your credit card with Stripe and understanding how to use it is the best experience ever.

7. Google Wallet

Google Wallet is easy to use. Furthermore, it is fast and convenient. Google Wallet is useful for online shopping. You can operate a Google wallet right from your palm by using your smartphone. Connect your debit card with Google Wallet and send money or purchase items online anytime and anywhere in the world.

8. Apple Pay

Apple Pay is not popular among the online money market. However, it is an alternative to others. It is one of the emerging platforms that are expected to gain many users in the future. 

Most of these merchant service providers require internet connections. Customers who understand how to use apple smart phones and tablets can carry out secure transactions using Apple Pay. As a retailer, you must ensure that you receive a confirmation message indicating that your payments are successful.

How do you choose the best third-party merchant account?

As we have seen, there are several companies offering third-party merchant accounts in the world. Now, how do you choose the best? If you understand the importance of using credit cards for your business, then you will give it the best priority. To identify the most favorable partner for your business, you need to consider the following aspects.

Transaction fees: All third-party merchants don’t offer the same service fee. You must study the most appropriate in terms of charges to ensure that your business does not lose a lot of money. For example, PayPal charges at most 2.9% on the transactions plus $0.30 for each sale.

See whether they have set up fees. PayPal is among those that don’t charge an account set-up fee. Other merchants may charge you a small price to set-up your account.

Check the payment methods: Does the company allow customers to send money with credit card? Most of these companies mostly allow online transactions. However, others allow both online and in-person purchases. Also, check that the third-party merchant supports if not all but the majority of credit card types. An online merchant who supports all cards makes any card order to purchase goods and services and have the deducted money channeled to your account through third-party merchant companies.

Check the transaction limitations: Most third –party merchant accounts have no limits on the transaction volume. However, the problem lies with the payment facilitator. Most of these facilitators tend to put a daily or monthly limit. If you get a merchant using a facilitator with no restrictions, then you are good to get started with them.

Customer support: It is essential. Sometimes you may develop problems with your payment system. Your third-party merchant should have a 24/7 hotline for tackling emerging issues. It is better to choose a company with both an email and phone service customer care.

Bottom line

We have seen various ways on how to go about credit card payments when you don’t have a merchant account. It follows that merchant accounts are better. A third-party merchant service should be there to help you climb the ladder. As your business grows, you should be able to consider having your merchant account. The advantages are countless on this account. You will have unlimited transactions and low processing fees.