Do I Need a Merchant Account for a Card Machine?

By Olivia Johnson - Trusted UK Business Expert

Last Updated 1st of June 2026

4 minute read

If you’re thinking about taking card payments in your business, you might wonder if a merchant account is really necessary. Many small businesses and shop owners face this question. We’re here to make it simple and clear so you can make the best choice.

Most card machines need a merchant account to process card payments. A merchant account is a special type of bank account that holds card payments before moving them to your business bank account. Some providers, like SumUp or Square, offer alternatives without separate merchant accounts.

Understanding merchant accounts helps you avoid costly mistakes and pick the right payment system. In this guide, we’ll break down exactly why a merchant account matters, when you need one, and what alternatives are available.

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What Is a Merchant Account and Do I Need One for a Card Machine?

A merchant account is not the same as your normal business bank account. It is a secure holding account used by banks or payment providers to receive money from card payments before it is settled into your business bank account.

When a customer pays by card, the money does not go straight to you. Instead, it is authorised and moved into your merchant account. Only after checks and fraud prevention steps are complete is the money transferred to your business bank account. This process usually takes 1–3 working days, depending on your provider.

So, do you need one? The answer is yes, in most cases. Traditional card machines—like those offered by banks and payment processors—require a merchant account. Without it, your business cannot accept payments through standard card terminals.

But things are changing. Newer payment solutions like Square, Zettle, and SumUp offer “all-in-one” systems. They combine the card machine, merchant account, and payment gateway into one service. With these, you don’t need to set up a separate merchant account, which is why they are popular with start-ups, cafés, market stalls, and small retailers.

Why Merchant Accounts Are Important

Merchant accounts exist to protect both the business and the customer. They ensure:

• Security – Payments are verified and fraud-checked before funds are released.
• Stability – Customers can pay with Visa, Mastercard, or Amex smoothly.
• Speed – Payments clear faster than traditional cheque or cash deposits.
• Trust – Customers trust businesses that accept card payments.

Think of a merchant account like a “middle step” that ensures money safely travels from the customer’s bank to your business bank.

Types of Card Machines and Merchant Account Needs

Not all card machines work the same way. Here’s a quick breakdown:

This table shows that while a merchant account is usually necessary, many providers now bundle it into their service to make things easier.

How Do I Get a Merchant Account?

Setting up a merchant account can feel daunting, but it’s quite straightforward if you know the steps.

• Choose a provider – Decide if you want a bank, payment processor, or all-in-one solution.
• Apply – Providers will check your business type, credit history, and risk level.
• Approval – Once approved, you’ll be given access to your merchant account.
• Integration – Connect your merchant account to your card machine or EPOS system.

Most banks and processors charge monthly fees and transaction fees. All-in-one providers often skip monthly fees and charge only per transaction, which can be cheaper for small businesses.

When You Might Not Need a Merchant Account

If you’re a very small business, freelancer, or occasional seller, you might not want the hassle of opening a merchant account. That’s where providers like SumUp, Square, and Zettle are useful. They let you take card payments without setting up a separate account.

However, there are trade-offs:

• Higher transaction fees (usually around 1.5%–2.75%).
• Money may take longer to settle into your account.
• Limited customisation compared to full merchant accounts.

If you process high volumes of sales, a dedicated merchant account could save you money long-term.

Pros and Cons of Merchant Accounts

This balance shows why your choice depends on your business size and goals.

Common Myths About Merchant Accounts

Myth 1: You can’t take card payments without one.

→ Wrong. All-in-one providers make it possible.

Myth 2: They’re only for big businesses.

→ False. Small businesses can benefit from lower costs with merchant accounts.

Myth 3: They’re too hard to set up.

→ Not true. Many providers now have streamlined, online applications.

Final Thoughts

So, do you need a merchant account for a card machine? Yes, in most cases—but not always. If you choose a traditional card machine, you’ll need one. If you pick a modern provider like Square or SumUp, the merchant account is built in.

The right choice depends on how your business operates, how much you sell, and how important lower fees and stability are compared to ease and flexibility.

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FAQ

Can I use a card machine without a merchant account?

Yes, if you use an all-in-one provider like Square or SumUp. Otherwise, you need a merchant account.

How long does it take to set up a merchant account?

Usually between 1–2 weeks, depending on provider checks and approvals.

Do merchant accounts cost money?

Yes, most charge setup fees, monthly service fees, and per-transaction fees.

Which is cheaper: merchant account or all-in-one service?

For high sales volumes, merchant accounts are cheaper. For low sales, all-in-one providers are simpler and more cost-effective.

Can I switch merchant account providers?

Yes. Many businesses switch providers to save on fees or improve service.

Discover how merchant accounts power your card transactions and what your business could be missing. 🔎 Click below for the full breakdown — don’t miss it.