How to Process Payments without a Merchant Account
Credit Card Processing
A merchant account is an essential part of credit card processing, although some people mistakenly think that they can successfully accept credit card payments without opening one. The truth is that merchant services entail serious risks and financial obligations associated with consumer and merchant fraud, credit card chargeback handling, and, potentially, ACH returns (if ACH payments are involved). Some business has to assume these risks and obligations in order to protect the merchant’s customers: that is how the industry works. And this entity is, usually, a merchant acquirer (an acquiring bank) that underwrites merchant account applicants and issues merchant accounts to them. A merchant account is an indicator of credibility of, or a sort of a loan, provided to the applicant. Even if you are working with some aggregator (for instance, PayPal), in order to get an opportunity to process credit card payments, you have to go through the same types of verifications, that are required from an entity that wants to open a merchant account.
A more detailed explanation can be found in the respective article on Paylosophy and you are welcome to read it.