If you’re self-employed and want to take card payments, the phrase “merchant account” will pop up sooner or later. But here’s the thing – most sole traders don’t know what it is, whether they need one, or how it fits into everyday business life.
This guide breaks it down in plain English. No waffle, no sales pitch – just what you need to know to take card payments properly, whether you’re running a market stall, freelancing, or selling services online.
So, what is a merchant account?
In simple terms, a merchant account is a holding area. When a customer pays by card, the money goes here first. The payment is authorised, checked, and then transferred to your actual business bank account – usually within a day or two.
You don’t use it like a normal bank account. You don’t log in or move money around. It’s just a behind-the-scenes system that helps process card transactions securely.
Do sole traders need one?
It depends on how you want to take payments. There are two main routes:
Option 1: Get your own merchant account
This is the traditional setup. You sign up with a merchant services provider – someone like Worldpay, Elavon, or Global Payments – and they handle the money flow. You also need a payment gateway if you sell online, and a terminal if you take payments in person.
It’s a bit of a setup job. The fees can be lower in the long run, but there are usually additional costs, such as paperwork, contracts, and monthly minimums. It suits bigger or growing businesses, less so for side hustlers or one-person bands.
Option 2: Use an all-in-one solution
If you’ve looked at SumUp, Zettle by PayPal, or Square, you’ve already seen this in action.
These services include a merchant account in the background — you don’t apply for one separately. They handle it all for you, and send the money into your bank account automatically.
They’re fast to set up, easy to use, and the fees are straightforward, typically ranging from 1.69% to 2.5% per transaction. Great for sole traders, mobile businesses, or anyone who doesn’t want to deal with contracts.
What about online payments?
You don’t need your own merchant account here either. Payment providers like Stripe or PayPal Business do the same thing: they accept card payments on your behalf, hold the funds briefly, then release them to you.
They charge similar fees and often integrate directly with accounting software like Xero or FreeAgent. No extra accounts needed.
Is it secure?
As long as you use a provider that’s PCI DSS-compliant, yes. These are industry rules that keep card data safe. Reputable providers handle this behind the scenes — you don’t need to worry about encryption or security certificates.
If you’re taking payments via your own site, you also need to think about data protection. The Data Protection Act 2018 and UK GDPR rules apply if you’re collecting customer details.
If that’s you, make sure you’ve a privacy policy and a secure checkout in place.
What will it cost me?
With an all-in-one system like SumUp or Zettle, expect to pay:
- ~1.5%–2.5% per card payment
- No monthly fees in most cases
- Money hits your account in 1–2 days
With a traditional merchant account, you might pay:
- Lower per-transaction fees (e.g. 1.1%)
- Monthly service or rental charges
- Minimum usage terms and contract tie-ins
So it depends on your volume. If you’re running a stall at the weekend or invoicing a few clients a month, the simple route wins every time.
How do I choose?
If you’re just starting out, or your business is small and nimble, go with an all-in-one card reader. They’re plug and play, and you can sign up online in minutes.
If you’re processing thousands in sales every week and want lower fees, it may be time to speak to a provider like Worldpay or Elavon and look at a bespoke deal.
What about customer support and reliability?
It’s not all about fees. Consider how easy it is to get help when something goes wrong. All-in-one platforms like Square and Zettle tend to offer fast support via live chat or phone. Traditional providers might have a dedicated account manager, but also longer wait times or clunky admin systems.
Reviews matter too. Look at Trustpilot or forums for real-world feedback. No system is perfect, but if people regularly complain about settlement delays or dodgy terminals, that’s a red flag.
And check how well the service integrates with what you already use. Does it link with your invoicing tool? Can you export reports easily for your accountant? These little things can save you hours later on.
Final thoughts
Merchant accounts aren’t dead, but most self-employed people don’t need one in 2025. The tech has moved on. Whether you’re getting paid on the go or through your website, you’ve got flexible options that don’t involve a complicated setup or old-school paperwork.
As always, keep an eye on your costs, check provider reviews, and make sure the platform you choose handles security properly. That way, you can get paid without the hassle.