I have had a quick look but couldn't see anything related.

Basically, if we were to accept payments for events on our website, via paypal (essentially a Buy it now! button), as a business, do we need a merchant's account, or will a regular bank account be acceptable?

I may have some confusion in terms. My understanding is you need a merchant's account to accept credit card payments, but as we are using PayPal, is this necessary?

Thank you for any clarification.

disclaimer - I've read What are some options for taking payments on my website? but it doesn't explicitly say if we require a merchant account or not.

Thank you.

7 Answers 7


Merchant accounts act as an intermediary for collecting money. It would be like an EFTPOS system if you were to own a shop front. For EFTPOS you need a merchant account who collects money on behalf of you, usually a bank or visa/mastercard.

A regular bank account for Paypal.

Merchant accounts can be setup through banks or other 3rd party providers. Most 3rd party providers, provide web portals for handling transactions, without the web designer having to create it themselves. You will have to provide a point back to yourself to indicate if the transaction was successful or not so the transaction can complete.

Depending on the country, merchant accounts are not that difficult or expensive to setup.

I suggest that your talk to your bank first, then to a 3rd party online merchant transactor. I think your bank could provide you a list of reputable online merchants/payment services.


You only need a merchant account if you're going to be processing credit card transactions—whether by a wired/wireless credit card terminal, by credit card slips, or by an online payment gateway, then you need a merchant account. The merchant account is basically just a bank account that can receive credit card payments.

If you're using PayPal standard, then you're not actually processing any credit card transactions or receiving credit card payments. PayPal is the one who does all of that, and you get the money from them after they've processed the payments and received the money from the customer.


No. If you're using PayPal's Payment Standard or Payment Pro options, you're more or less piggy-backing on their merchant account. (That's probably not quite technically correct; but the important part is that the answer to your question is "no.")

The Payflow Gateway option does use your own merchant account(and has a different fee structure), but it doesn't seem that's what you're doing.


It may increase sales if you use a trusted payment processor such as PayPal, AlertPay, Google Checkout, Amazon Payments and the rest. This is due to persons like me not wanting to enter raw data in a website I have never heard of before.

If your selling products then merchant account is not "really" needed. Though it is essential once you get past a certain volume of sales.

  • 1
    On the flip side, a lot of people don't have a PayPal/Google Checkout/Amazon Payments/AlertPay account and won't be willing to sign up for another account just to buy one thing from one website. That's the reason why PayPal has such a lock on the online payment industry. It's just hard to convince people to sign up for a new service in order to give you money. It's hard enough just getting users to sign up for an account on your store site. Feb 28, 2011 at 16:29
  • 1
    Not to mention the fees associated with some of those sites are much higher then a traditional merchant account. Plus they can freeze your money with less cause then a traditional merchant account provider.
    – John Conde
    Feb 28, 2011 at 16:54

Question 1: Accept payment on your website, via paypal, need merchant account from elsewhere?

Quick answer: No, not needed.

A little bit more elaboration: Paypal already 'acts', on your behalf, as your merchant account for transactions from your website.

Do note that having a paypal account is a different thing from having your own merchant account.

Try to think of Paypal as someone whom you hire for accepting online payments on your behalf, where every customer personal details are all taken care of by their servers.


Not always you can check google checkout or yahoo cart and other options like alerpat.. or GO pay. Merchant accounts though are more reliable and give better rates


From this site, Merchant Accounts are used as a payment processor to accept money and deal with refunds and charge backs. You can go with third party payment processors like Paypal, Nochex, Dwolla or Google Checkout instead, but the costs vary. Generally if you're going to be accepting a lot of payments it's better to go with a dedicated merchant account service than a third party as it will save you money, but no, you don't explicitly need one. It might be an idea to go with Paypal/Google until sales volume suggest better returns.

Your Answer

By clicking “Post Your Answer”, you agree to our terms of service and acknowledge you have read our privacy policy.

Not the answer you're looking for? Browse other questions tagged or ask your own question.