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Online Credit Card Payments: With Or Without A Merchant Account?

Credit cards are an essential form of payment today. That goes for in-person sales, as well as online ones. Accepting credit cards for small businesses is more important than ever, but the big question is: Do you need a merchant account to do so? The short answer is no, but before making a decision to go online without a merchant account, it will be helpful to examine the pros and cons of the options you have.


There are several pros to going online without a merchant account. For starters, signing up is easier. You will likely be using a third-party payment processor, typically a payment aggregator, and getting started with these is quicker than starting with a payment processor that requires you to have a merchant account. Another benefit of using a third-party payment processor is that they may have a more simplified fee structure, though it may be worth noting that your average fee can sometimes be higher. Another benefit of using a third-party payment processor is that you will be unlikely to get stuck in a long-term contract. Typically, canceling your contract will be fairly easy and straightforward, and can likely be done online.


Though there are some pros to not set up a merchant account, there are also several cons. The first is that with a third-party payment processor, you will have less rate flexibility. You will not be able to reap the benefits that you may with certain payment processors for having more transactions. As mentioned, your overall transaction fee will likely be higher than they would be if you set up a merchant account. Another con is that you are more likely to have your account canceled, or your service interrupted. Third-party payment processors may be more likely to take on businesses but are also more likely to hold or cancel accounts due to certain transactions or activities, based on the type of business you do. Third-party payment processors are also less likely to have adequate customer service. Working with a merchant services provider or a traditional payment processor can allow you to reap the benefits of customer service that you can use at any time, for any type of issue. Finally, if you choose to sell online without a merchant account, you may be at an increased risk of fraud. In addition, you may not have the safeguards that can protect you in the event of a breach. This can result in a huge loss for your business, and hurt your reputation and relationship with your customers.

Making The Decision

There are many pros as well as cons to accepting credit cards online without a merchant account. If you feel that using a merchant account seems like a better option for you, we can be of service. Moolah is in the business of accepting credit cards for small businesses. We provide FAST payment processing with a flat rate, no hidden fees, and take effort to safeguard security. We’re also known for our customer service. We even provide fraud protection in the event that a breach takes place. There are many reasons to consider Moolah, and we aim to be the best option for what we do.