What is a merchant account and how do you choose the right provider?

A merchant account payment gateway and a merchant account serve different functions in the payment stack. The payment gateway is the technology layer that captures and transmits payment data. It initiates the transaction. 

The merchant account is where funds are held and settled after a transaction is authorized. It’s a holding account where funds are temporarily stored while the acquiring bank processes payments. 

You need both to process payments end-to-end. You can choose to use different technology partners to support each part, or you can find a partner that bundles the entire payments flow into one stack.

A payment aggregator pools multiple businesses under one shared merchant account, which speeds up onboarding but reduces control and can mean higher per-transaction costs at scale. 

A dedicated merchant account gives your business its own account with the acquirer, which provides more customization, better rates at volume, and cleaner reporting. For most enterprise businesses, a dedicated merchant account is the better long-term choice.

No, you cannot accept credit card payments without a merchant account. Some setups make getting a merchant account an easy part of your payments flow. When you work with Adyen, you get a merchant account as soon as you start processing payments with our technology. 

Some industries — such as travel, gaming, or subscription businesses — are classified as higher risk by acquiring banks due to factors like high chargeback rates or regulatory complexity. A high risk merchant account is designed specifically for these businesses. Fees are typically higher to reflect the additional risk, but it gives businesses in these sectors access to the payment processing infrastructure they need.