Can you accept customer payments without having a Merchant Account?
For many businesses getting a merchant account can be a huge hassle. Filling out forms, providing bank account statements etc is time-consuming and even when done provides no guarantee of getting the merchant account.
There are “Super Payment Facilitation providers” like Stripe and Square that make it easier to accept payments but in essence, you are obtaining a sub-merchant account that they can terminate or withhold funds from you at any time. There are many example to be found online of this very thing.
So is there another way to take payments for goods or services without using cash or securing a merchant account?
The answer is absolutely with a couple of buts.
If you are in the US and have a US bank account at an in-network bank you can potentially accept customer payments. The other BUT is that your business must be legit and an acceptable business type. This payment solution does tend to be more high-risk tolerant and we will explain why.
So what is it and what’s the story?
The answer is to reverse the payment originator and eliminate the need for a merchant account. Essentially the consumer initiates a push payment from their bank account. There is no Merchant Account whereby a payment processor receives the sale proceeds from the consumer and in turn (24-48 hours later) funds the business.
Conventionally your merchant account provider (or Stripe etc) process the payment by DEBITING (pulling $ out) of the consumers credit card or bank account. They then collect those $ and in turn oay you out via an ACH credit.
With Push Payments or Consumer Permission Payments, that payment flow is reversed. At checkout the consumer connects to their online bank platform and an ACH credit is then pushed DIRECTLY from the consumer bank account to the business bank account. A Push Payment Provider enables the customer to push funds directly to the merchant being paid (bank to bank)
If you have processed payments for any period of time you can see two MAJOR benefits:
1-No Chargebacks: The consumer is authorizing with express permission the payment required.
2-No Declines: The consumer can’t push money NOT in their bank account.
There are additional Push Payment Benefits as well
Want more details? Visit AgilePayments.com and look for “Push Payments”