What is the difference between a business bank account and a merchant account?

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Hi, I’m mulling over getting a limited company set up using one of these formation agents. On most of these sites, they’re pushing business bank accounts and merchant accounts, too. I always thought these were the same thing. How are they different?

Answers

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Business bank accounts and merchant account are not the same thing, though they are both technically called ‘bank accounts’.

A business bank account is simply a current account that is set up in the name of your business - it is the same as your personal bank account but it’s used only for business purposes, not for personal use. You do not have to open a business bank account, but it is advisable to do so when you start trading.

A merchant account is a special type of bank account that allows businesses (the ‘merchants’) to accept and process debit and credit card payments face-to-face, online and by telephone. If you want to take card payments, you will need a merchant account.

a year ago
 

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