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Merchant Accounts & Business Accounts Explained
While they're similar, there are some crucial differences to remember. Here's your breakdown of merchant accounts & business accounts.
What is a Merchant Account?
A merchant account is essentially the middleman between your bank and your customers. When you accept card payments, the customer’s card sends the funds from their bank account to your merchant account. Your merchant account then sends the money to your business’s bank account.
Where a business bank account holds your funds, a merchant account’s role is to process them.
If you want to find out more about how merchant accounts work, how much they cost, and how they benefit your business, read our ultimate guide on merchant accounts.
What is a Business Bank Account?
A business bank account is the final destination of your business’s money. The money leaves your customer’s bank account, is processed by your merchant account, and is sent to your bank account.
Once the money from a sale ends up in your business bank account, you can then spend it where it’s needed.
What's the Point of a Merchant Account?
While it seems quicker to accept payments directly into your business bank account, it could cost time in the long run.
Customer’s payments have to go through checks at their end before their bank releases the funds, which can take days. Your merchant account will ensure you’re able to access these funds quickly. So while merchant accounts add an extra step, they mean your business ultimately has greater access to the money it makes.
Want to know more about how card payments work?
While this article focuses on the differences between merchant and business accounts, we also have in-depth guides that fully explain everything else you need to know about taking payments. Explore below:
Merchant Accounts vs Business Accounts
Merchant accounts work wholly differently from business bank accounts and they’re not the same thing. Both can prove invaluable to your business by offering different kinds of benefits.
A business bank account allows you to save or spend your money however you choose. This is not a function of merchant accounts, which prove their worth in other ways.
Ultimately, the two types of accounts are designed to work together. Their benefits play into the benefits of each other. That’s why many businesses across the UK use them in conjunction with each other, and it’s also why your business should consider doing the same.
FAQs
What are the differences between merchant accounts and business bank accounts?
A business bank account allows you to save or spend your money however you choose. This is not a function of merchant accounts, which prove their worth in other ways.
Ultimately, the two types of accounts are designed to work together. Their benefits play into the benefits of each other. That’s why many businesses across the UK use them in conjunction with each other, and it’s also why your business should consider doing the same.
What is a merchant account?
A merchant account is a special business bank account that allows you to accept credit and debit payments. It acts as a middleman between your business and the bank that provides your customers with their credit or debit cards.
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