What is a Merchant Account?
A merchant account is a special type of bank account that allows a business to accept credit and debit card payments. It acts as a holding account where card transaction funds are deposited before being transferred to the business's regular bank account.
How Merchant Accounts Work
When a customer pays by card, the funds do not go directly into the merchant's bank account. Instead, they are deposited into the merchant account — a holding account managed by the acquiring bank. After a settlement period (typically 1-3 business days), the funds are transferred to the merchant's regular business bank account, minus processing fees.
Do You Need a Merchant Account?
If you want to accept card payments, you need either a dedicated merchant account or an account with a payment aggregator:
Dedicated Merchant Account
Set up through an acquiring bank (Lloyds Cardnet, Barclaycard, Worldpay, etc.). You go through an application and underwriting process. Best for established businesses with higher transaction volumes — typically lower fees per transaction.
Payment Aggregator
Services like Stripe and PayPal process transactions under their own merchant account. You can start immediately without a separate application. Best for new businesses or lower volumes — simpler setup but typically higher per-transaction fees.
Merchant Account Costs
Typical costs include:
- Setup fee: One-time charge (some providers waive this)
- Monthly fee: Account maintenance, typically £15-30/month
- Transaction fees: Percentage plus fixed fee per transaction
- PCI compliance fee: Annual or monthly charge for PCI DSS compliance
- Chargeback fee: Charged per dispute, typically £15-25
Paytia works with any merchant account. Whether you have a dedicated merchant account with Lloyds Cardnet, Barclaycard, or Worldpay, or use a payment aggregator like Stripe, Paytia's secure phone payment platform integrates with your existing setup. There is no need to change your merchant account or acquiring bank to use Paytia.
Frequently Asked Questions
What is the difference between a merchant account and a business bank account?
A business bank account is your regular operating account where you manage day-to-day finances. A merchant account is a specialised holding account specifically for card payment funds. Money flows from card transactions into your merchant account, then settles into your business bank account.
How long does it take to get a merchant account?
A dedicated merchant account typically takes 3-10 business days to set up, depending on the acquirer and the complexity of your business. Payment aggregators like Stripe can have you processing payments within hours.
Can I have multiple merchant accounts?
Yes. Some businesses use multiple merchant accounts for different brands, channels, or currencies. This can also provide redundancy — if one account has issues, transactions can be routed through another.
See how Paytia handles merchant account
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