What is a merchant account and why do I need one to use a card payment machine?

If you want to start using a card payment machine you need a business account that lets you do it. That’s when a merchant account comes in.


Payment using phone taking place






If you’ve started looking into getting a card payment machine for your business, then you’ve probably come across something called a merchant account.

Merchant accounts are an essential part of using a card payment machine and accepting card or mobile payments.

But what are they?

How do they work?

And why exactly do you need one if you want to take card payments?

We’ll tell you.

What is a merchant account?

Different to a business bank account, a merchant account is the place where funds from any payments you take first land.

Without one, you won’t be able to accept card payments.

How they work is pretty simple.

When a customer pays for something in your shop using a debit card, their card and transaction details are checked to confirm they have enough money in the account to make the payment, and to prevent fraud.

It only takes a few seconds to make these checks.

As long as they have enough money in their account, the payment will be authorised.

If they don’t have enough money, the transaction will be declined.

You don’t have to worry about losing out when accepting card payments, because transactions are only authorised when your customer has the money to pay for something.

Once the payment has been authorised, the money will be held in your merchant account before being released to your business bank account.

This waiting time is called your settlement period.


Payment taking place using contactless with card



Shop counter using Handepay Card Payment Machine to process sale

What payments can I accept using a merchant account?

Once you have your merchant account set up, you’ll be able to start accepting payments if you’ve got the right equipment.

With your merchant account connected to a card terminal, payment gateway or virtual terminal, you can accept a variety of electronic payments, including:

  • Card payments (Chip and PIN & contactless)
  • Mobile payments via digital wallets (Apple Pay, Samsung Pay etc)
  • Payments over the phone
  • Online payments

Choosing the right merchant account

The type of merchant account you’ll need will depend on how you want to accept card payments.

No matter which one you use, it will work in exactly the same way.

There are a few types of merchant account that you could get.

But the most common are:
- A standard merchant account
- An internet merchant account

A standard account is one you need if you’re going to accept card or electronic payments in store.

An internet merchant account is a standard merchant account that is typically used to accept payments online.

It’s typically linked to a payment gateway, which processes payments online when making sales on an eCommerce website.

How much does it cost to have a merchant account and take card payments?

Costs will vary depending on your supplier and the type of payments you’re accepting.

You’ll pay a small per transaction fee for every payment made.

You’ll also pay monthly rental charges on your card payment machine.

Some suppliers will also charge compliance and non-compliance fees, as well as other charges that you might not be aware of until you start to see your monthly bills come through.

Make sure you understand the charges you’ll face so you can be sure getting a card payment machine and merchant account is for you.

At Handepay, we’re 100% transparent on the costs to you so you’ll know exactly what you’ll pay before you sign up.

If you come to Handepay from another provider, we might also be able to cover the cost of switching to us if your card payment provider tries to charge you an exit fee.

You can always ask us to find out more or take our price challenge to see how much you could spend, and save, by taking on a merchant account and choosing a card payment machine with Handepay.

If you’ve never taken cards before, or already use a  merchant account when accepting card transactions, we can help.

With transparent pricing and excellent customer support, over 28,000 businesses trust us to oversee their merchant account.

Get in touch with one of our experts, who can help you understand your merchant account requirements and make sure you’re getting the best deal.


Financial disclaimer:

Terminal hire contracts are provided by Merchant Rentals Limited, who is authorised and regulated in the UK by the Financial Conduct Authority (FCA) for Consumer Hire under FRN 720500. Terminal hire can be for consumer hire and non-regulated hire contracts. Please check your contract carefully for details. Regulation of all consumer hire fall under the control of the FCA.

Handepay Ltd is authorised and regulated by the FCA for Consumer Credit under FRN 673564. Handepay is a credit broker for consumer hire not a lender.

Handepay acts as an introducer of card acquiring services on behalf of EVO Payments UK, the card acquiring service provider. EVO Payments UK is the trading name of EVO Payments UK Ltd, a payment institution that is authorised and regulated by the Financial Conduct Authority (FRN number 959332).

Existing Cards Businesses- The one-month rolling terminal hire contract from Merchant Rentals is only available to businesses that are switching from their current acquirer to EVO Payments UK arranged through Handepay.

New to Cards Businesses- The 12-month terminal hire contract from Merchant Rentals is only available to businesses that are new to card payments and wish to receive acquiring services from EVO Payments UK, arranged through Handepay.

The Next Day Banking Settlement service provided by EVO Payments UK incurs an additional fee of £4 a month on top of your acquiring service charges and fees. Provided your card machine performs a reconciliation before 12am (midnight), you’ll receive settlement of funds the next banking day.

Editorial disclaimer:

The information we provide does not constitute financial advice and might not apply to your business. Always carry out research into your business’ needs when choosing a new merchant services provider.

Sometimes, we link to other third-party websites to provide you with additional information. At the time of publication, we consider the information accurate, however, we do not have control over their content and are not responsible if any information on these websites change.

The products we display on our website are for illustrative purposes only - if your business requires additional facilities, you may receive a different model than advertised.

All of the information contained on this website, including fees, services and functionality, are correct at time of publishing. E&OE.