Acquiring a merchant account for your business is vital if you want to take card payments and receive electronic purchases. But, what if you have a poor credit history and find it difficult to find merchant account approval?
You could resign yourself to running a cash-only business forevermore, or you could find a merchant account with no credit check required, ensuring that you can grow your business regardless of your credit score.
In this article, I'll highlight the best merchant accounts with no credit checks so you can discover the best options for your business.
| Provider | Score | Details |
|---|---|---|
| 1. PayPal Pro | ★★★★★ | Click Here |
| 2. Stripe | ★★★★★ | Click Here |
| 3. Square | ★★★★★ | Click Here |
What Is a Merchant Account?
A merchant account acts like a business bank account so you can accept a vast range of transactions and perform like third party payment processors.
When a customer makes a purchase by either a credit card, a debit card, online payments or contactless transaction, you will need a merchant account to act as an intermediary.
This means that when a customer makes a transaction and presents their card or digital wallet, the merchant account acts as a holding area between the transaction being approved and the funds transferred to your business bank account.
The merchant account safeguards your business finances and data as well as the customer’s money and personal information, only sending the funds once approval has been reached.
Can You Get a Merchant Account With No Credit Check?
Some merchant account providers will provide a merchant account to businesses without a credit check. However, some merchant account providers will view a low credit score as a high risk business and will refuse to even contemplate issuing a merchant account.
In addition to your credit report, the type of business you run might also signal to providers that you present a high risk. For example, if you run a payday loan company, a travel business, or a gambling site, some merchant account providers will avoid offering you an account.
If you do obtain a merchant account with no credit check, it is very possible that you will face higher fees and charges.
For example, a standard merchant account may charge transaction fees of 1% of the purchase value. However, a merchant account with a low credit rating could charge a transaction fee of around 4% of the purchase value for the same service.
What Is a Merchant Account Credit Check?
A merchant account credit check will search your credit history for the last 10 years, in particular looking for any evidence of bankruptcy.
If the merchant account views your business as a high risk, you may face higher transaction fees and fewer options available for your business.
In addition to higher transaction fees, a registration fee could be required along with a contract to tie you to the merchant account for a specific period.
However, after you have paid your bills on time and your credit score improves, merchant account providers could reduce the fees you are required to pay.
How Does a High-Risk Merchant Account Differ?
When implementing a credit check, merchant accounts providers may view you as a high risk. You could face some significant differences if you accept a high risk merchant account with no credit check.
Higher Transaction Fees
A standard merchant account may charge fees of around 1% of the transaction value, sometimes less than this amount. With a high-risk merchant account, you could be charged much higher transaction fees of around 4% of the purchase value, or even higher.
Flat Fees
Some providers charge a flat fee for payment processing, for example, 10p per transaction. A high-risk merchant account may charge a higher flat fee, such as 50p for every transaction made and processed by the merchant account.
Monthly Costs
Depending on the merchant account provider you have chosen, you might need to pay a monthly cost, or an annual cost. A standard account might be charged £20–£30 each month on a subscription basis. However, a high-risk account might face a charge of above £50 every month.
Contract
Some merchant account providers do not require a contract to be signed to access their services. However, a high-risk merchant account might require a contract, tying your business to the merchant account provider for 6, 12, or 18 months.
Settlements
When your customer makes a transaction, you will not receive that cash instantly. Some providers will transfer you the cash owed the next business day, or within several business days.
A high-risk account might need to wait longer to receive payments made by customers, sometimes in excess of one week.
At a Glance, Pros and Cons
With reams of information to read, sometimes you need a succinct overview of the benefits and limitations of acquiring a merchant account with no credit check.
Take a look at this section for a review of the pros and cons of a merchant account with no credit check:
| Pros | Cons |
|---|---|
| ✔️ Process credit and debit cards — You do not need to be a cash-only business anymore when accepting credit and debit card payments. | ❌️ Fees — You will need to pay a transaction fee for every purchase processed. |
| ✔️ Online payments — Allow customers to make purchases online. | ❌️ Higher costs — A high-risk merchant account may charge higher transaction fees. |
| ✔️ No monthly costs — Many merchant account providers do not charge a monthly fee. | ❌️ Flat fees — Some providers will also charge a flat fee for every transaction made. |
| ✔️ Build your credit rating — As long as you pay your bills on time, you will be able to build your credit rating. | ❌️ Contracts — Some merchant account providers will require that you sign a contract. |
Best Merchant Accounts With No Credit Check — Reviews
If you are searching for a merchant account with no credit checks, look no further.
Here are our expertly reviewed the best merchant accounts requiring no credit check:
1. PayPal Pro — Best Overall Choice
- Great for in-person and online purchases
- Accepts credit and debit cards, PayPal and PayPal Credit
- Monthly fee: £20
- Terminal cost: Between £15–£75
- Transaction fees: From 1.9% + 20p to 3.4% + 20p
PayPal Pro accepts a vast range of payment methods to satisfy your business and your customers. Payment methods include credit and debit card payments, as well as electronic purchases, PayPal transactions and PayPal Credit.
This merchant account option is perfect for in-person and online purchases, offering your business flexibility and choice.
There is a monthly fee of £20 to pay when signing up to a PayPal Pro account, with the cost of a terminal ranging between £15 and £75.
Transaction fees will vary according to the payment method used, although fall in the range of 1.9% to 3.4% of the transaction, in addition to a flat fee of 20p for each purchase.
2. Stripe — Best for e-Commerce
- Easy to use for new business owners
- Transaction fee of 1.5% + 20p for UK cards
- Transaction fee of 2.5% + 20p for EU cards
- Zero additional fees
When acquiring a Stripe merchant account, you will gain easy-to-use internet merchant accounts that are tailored to e-commerce businesses.
Fees and charges are clear with Stripe so you know what to expect. To process a UK credit or debit card, you will pay a transaction fee of 1.5% of the purchase value, in addition to a flat fee of 20p.
When processing an EU credit or debit card, the transaction fee you will be charged is 2.5% of the purchase value, in addition to the 20p flat fee.
Zero additional fees are charged for these transactions, although you can add other services to your account or use less common payment fees and charges.
3. Square — Best for New User Deals
- Great set-up scheme
- Transaction fees from 2.9% + 20p
- Terminal cost: £59
- Zero monthly fees
Square’s merchant account offers a great set-up for businesses, enabling the hardware you use to process payments to meet the needs of your business. You could even accept payments with your Android phone.
Transaction fees for this merchant account are typically 2.9% of the purchase value as well as a flat fee of 20p.
The standard card terminal will also cost you a one-off fee of £59, although there are zero additional fees and charges applicable.
Leading Merchant Accounts With No Credit Check: The Verdict
Our favourite merchant account with no credit check is PayPal Pro, offering in-person and online payments at a cost of £20 per month.
A range of transaction fees are readily available, depending on the payment methods used. However, you will receive a reliable service and be able to accept a variety of payments to enhance your customers’ experience.
