Do I need a merchant account to use a card machine?
Every card payment needs a merchant account behind it, but you do not always have to open one yourself. Pay-as-you-go readers from SumUp, Square and Zettle bundle one in: the provider holds the account and you trade under it. Contract providers such as Dojo open an account in your own business name, with your own merchant ID. The difference shows up in sign-up checks, settlement terms, and who deals with chargebacks.
What a merchant account actually is
When a customer taps their card, the money does not go straight from their bank to yours. It goes to an acquirer, a bank or payment institution licensed to accept card transactions on behalf of businesses. The acquirer holds your takings briefly, nets off the fees, and pays the balance into your nominated bank account. The merchant account is the acquirer's record of your business: your risk profile, your agreed rates, and the merchant ID that identifies you to Visa and Mastercard.
Acquiring is a regulated payment service under the Payment Services Regulations 2017, which is why acquirers are FCA-authorised. Paymentsense Limited, which trades as Dojo, holds FCA firm reference 738728. The FCA's perimeter guidance (PERG 15) also says that merely providing terminals or technical services to merchants is not itself acquiring. So the safe way to put it: card-terminal hire itself isn't an FCA-regulated activity; the acquiring behind it is.
Two ways to get one
1. Bundled, through a payment facilitator
In broad terms, pay-as-you-go readers work through a payment facilitator model. The provider holds the master merchant account with an acquirer and signs you up as a sub-merchant underneath it. You download the app, verify your identity, pair a reader, and you are live. There is no separate application for a merchant account because you never have one in your own name.
This is why the pricing is a single published number. SumUp charges 1.69% per in-person transaction with no monthly fee. Square charges 1.75% on UK cards in person with no monthly fee on its free plan. Zettle charges 1.75% with no contracts or recurring fees. Everyone on the platform pays the same rate, because the provider is pricing thousands of sub-merchants as one book of business. We compare those three directly on our Square vs SumUp and SumUp vs Zettle pages.
2. Your own account, through a contract acquirer
A contract provider opens a merchant account in your business name. You get your own merchant ID, a signed agreement with a minimum term, and a fees schedule priced for your turnover and trade. Dojo works this way. Its terms say the agreement “may have a minimum term as set out in the application documents”, and that after it you can end the agreement with one month's written notice.
Because the account is underwritten for you specifically, pricing is quoted individually. For higher card volumes a quote is often the lower option, and the only way to know is to compare a quote against your current statement. Our fee comparison calculator is built for exactly that.
What changes when you have your own MID
| Area | Pay-as-you-go reader | Contract acquirer |
|---|---|---|
| Who holds the merchant account | The provider (you are a sub-merchant) | You, in your business name |
| Merchant ID | Not normally issued to you | Your own MID on every statement |
| Sign-up checks | ID verification in the app | KYC plus a credit assessment via credit reference agencies (Dojo T&Cs) |
| Pricing | Published flat rate (SumUp 1.69%, Square and Zettle 1.75% in person) | Quoted individually for each business |
| Monthly fee | £0 on standard pay-as-you-go plans | Varies by provider; ask for the full fees schedule |
| Settlement | SumUp: next day at 7am incl. weekends | Dojo: by end of next business day (contract); review sites report next day incl. weekends |
| Chargebacks | Handled by the provider; fees vary | Per-chargeback fee in the fees schedule (Dojo: £28 + VAT per review sites) |
| Contract | None | Minimum term set in the application; one month's notice after that (Dojo T&Cs) |
PAYG rates and settlement from provider pricing pages; Dojo contract terms from Dojo T&Cs v1.6; Dojo fee amounts from review sites. All checked August 2026.
Underwriting
Opening your own account means the acquirer is taking on your risk directly, so it looks harder before saying yes. Dojo's eligibility condition requires “a legitimate business in the UK or a UK resident over 18 who has a legitimate business in the UK”, and its terms state that it carries out KYC and a credit assessment via credit reference agencies. Sole traders, partnerships and limited companies can all apply. Pay-as-you-go providers verify identity as well, since they are regulated firms, but the checks are lighter and happen in the app. We go into this in can I get a card machine with bad credit.
Settlement
Having your own MID does not by itself make money arrive faster. SumUp publishes next-day payouts at 7am including weekends and bank holidays into its business account. Dojo's contract commits to transfer by the end of the business day after the transaction, and no later than the third business day; review sites report next-day settlement including weekends in practice, with the exact time varying between sources. Read the actual settlement clause for any provider you are considering. Our next-day payouts piece explains why the detail matters for cash flow.
Chargebacks
With your own account, chargebacks land on you by name: the acquirer notifies you, you supply evidence, and a per-chargeback fee applies (Dojo's is listed in its fees schedule; review sites report £28 plus VAT). As a sub-merchant, the provider manages the dispute process through its dashboard and applies its own fee. Either way the money is taken back from you if the dispute is lost. The mechanism is similar; the paperwork differs.
When your own merchant account is not the right choice
If you take a few hundred pounds a month on card, the flat-rate reader is almost always the sensible option. You carry no minimum term, no monthly charge, and no risk of a minimum monthly service charge in a quiet month. The same applies to seasonal traders who shut for half the year, and to anyone trialling a new idea who does not yet know their volume.
Equally, if you have had a merchant account closed for chargeback problems, or your business has recent adverse credit, a contract acquirer's underwriting may be harder to pass. Pay-as-you-go is not a guarantee of acceptance either, but the entry bar is generally lower.
When it usually is
Your card turnover is high enough that a few tenths of a percent matters more than a monthly fee
You want a device with a built-in printer, 4G backup and an EPOS integration as standard
You need a named account manager and a contract you can hold the provider to
You want your own merchant ID for accounting, multi-site reporting or a future sale of the business
The crossover point depends on your average sale and your card mix, which is why we would rather you run the numbers than take our word for it. Our card machine fees explained page walks through every line you will see.
Want a quote to compare against your current statement?
Give us your monthly card turnover and a typical sale value. We introduce you to Dojo for an individual quote; you decide.
Get a Dojo quoteCapExpand is an authorised Dojo partner and is paid by Dojo when a business signs up through us. That does not change the price you pay.
Frequently asked questions
Can I take card payments without a merchant account?
Not in the strict sense, but you do not need to open one yourself. Pay-as-you-go readers from SumUp, Square and Zettle process your payments under the provider's own acquiring set-up, so the merchant account exists, it just belongs to them. You sign up in the app and start taking cards without a separate application.
What is a merchant ID (MID)?
A merchant ID is the reference number an acquirer assigns to your business when it opens a merchant account in your name. It appears on your statements and is what the card schemes use to identify you. Pay-as-you-go readers do not normally give you your own MID, because you are a sub-merchant of the provider.
Is a merchant account regulated by the FCA?
Acquiring card payments is a regulated payment service under the Payment Services Regulations 2017, so acquirers are FCA-authorised. The FCA's own guidance (PERG 15) says that merely providing terminals or technical services is not itself acquiring. In plain terms: card-terminal hire itself is not an FCA-regulated activity; the acquiring behind it is.
Do contract card machine providers run a credit check?
Usually yes. Dojo's terms, for example, say it carries out know-your-customer checks and a credit assessment using credit reference agencies before opening an account. Pay-as-you-go providers verify your identity too, because they are regulated firms, but the process is generally lighter and done inside the app.
Does having my own merchant account mean faster settlement?
Not automatically. Settlement speed is set by the provider, not by the account structure. SumUp states next-day payouts at 7am including weekends into its business account, while Dojo's contract commits to transfer by the end of the next business day. Compare the actual settlement terms rather than assuming one model is faster.
Provider rates, fees and terms change. The figures above were checked in August 2026 against the sources below; confirm them with the provider before you sign anything.
Sources (checked August 2026)
- FCA Handbook, PERG 15.3 Q21: acquiring and technical services
- Dojo terms and conditions v1.6: eligibility, minimum term, settlement, fees schedule
- SumUp: 1.69% PAYG, no monthly fee, next-day payouts at 7am
- Square UK pricing: 1.75% in person, no monthly fees
- Zettle UK pricing: 1.75%, no contracts or recurring fees
- Mobile Transaction Dojo review: chargeback fee (review site)
CapExpand Ltd (Company No. 14433858) is an authorised Dojo partner, not a card machine manufacturer. We are not currently authorised or regulated by the Financial Conduct Authority. Card machine pricing and availability are subject to change. All information on this page is for general guidance only.