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Who We Are

We like to think of Fido Merchant Services as your single partner for all your online and offline payment requirements. That’s because we offer a whole array of solutions to businesses-payment problems, and as we do it in a secure way, our clients can be assured that they are compliant with the PCI DSS (Payment Card Industry Data Security Standard).

Contact Us

General Enquiries

+44 (0) 20 8039 4347

[email protected]

Registered Office

IT Centre Innovation Way, Heslington

York, England.

YO10 5NP

March 4, 2021

What’s the difference between a Merchant Account and a Business Account, and why do I need both?

You’ve decided to start your own business. Website? Check. Potential clients? Check. Business account? Check. Merchant account..?

Unless you work in financial services or you’re a particularly clued-up business owner, you may not be aware that if you want to take card payments you need a merchant account. It is completely separate to your business account, and they could be provided by completely different banks. If you’re already accepting card payments, you may not have been aware you have a merchant account!


So, what’s the difference and why do you need both?

If you’re a limited company in the UK, it’s a legal requirement to have a business account but even if you’re operating as a sole trader or a partnership, it’s something that may benefit you. They essentially operate in the same way as a personal account but for your business, the crucial similarity being that you can only receive money via Bacs, CHAPS, Faster Payments, SWIFT, cheque and cash deposits.

If your business wants to securely accept credit or debit card payments, then you’ll need a merchant account. A merchant account ­does not work like a personal account because you, the account holder, can’t pay in or withdraw money. Weird, but stick with me.

Put simply, business accounts and personal accounts are yours to control; you can deposit and withdraw money, whereas a merchant account is for the banks to control. It’s where the money from transactions lands from customers’ accounts before being put into your business account.

The obvious question is “Why can’t the money from card payments go straight into my business account?”. Well, it kind of does, but via the merchant account.

When your customer pays by card in person or online, the customer’s details are sent to the acquiring bank (who provides your merchant account) via the card network (Visa, Mastercard, Amex etc) to the issuing bank (who provides the customer’s bank account). The issuing bank then checks if the customer has enough funds to pay, and sends that information back down the chain and you receive an accepted or declined notification. If the payment request is accepted by the issuing bank, then the money is paid into your merchant account after a few days. All parties involved in the card payment process charge small fees which are then deducted, and the remainder is paid into your business account.

Apart from the massive headache you may get from trying to understand all this, merchant accounts make everything much smoother from a business owner’s point of view.

It is, however, much harder to open a merchant account with a bank than a business account because you have to go through rigorous KYC (Know Your Customer) and KYB (Know Your Business) checks to prevent financial crime and money laundering. But fear not, because there is another middleman between you and your customer’s money, again to streamline the process. They’re called MSPs or Merchant Service Providers and their services will make your life even easier. One of the ways they can do that is by providing you with a merchant account, like we do here at Fido Merchant Services. You’ll still go through all of the rigorous checks, but because they have teams of people working on these checks and have their own agreements with acquiring banks (the guys who provide merchant accounts) or perhaps they are also an acquiring bank, it’s much quicker and more likely that you’ll be able to open a merchant account.

Don’t worry about your merchant account too much because you’ll very rarely even be aware of its existence if you partner up with the right Merchant Service Provider (MSP) for your business. If you would like to know more about our bespoke merchant services and payment gateways, please get in touch to find out how we could help make your dream a reality.


For more information please contact us by phone or email:

+44 (0) 20 8039 4347

[email protected]