Traditional merchant account
You're underwritten individually and get your own dedicated account. Pricing can be tailored to your volume and risk profile, and stability is generally higher for unusual or high-volume businesses that need predictable, custom terms.
Payment facilitator model
You operate under a larger provider's master account rather than your own. Sign-up is nearly instant and pricing is standardized across all merchants on the platform. This is how most instant-approval platforms work.
- Fast approval, minimal paperwork
- Published flat pricing
- Standardized terms for everyone on the platform
- Account reviews can be less predictable at high volume
Why underwriting matters
Processors carry real risk if a customer takes money and doesn't deliver a good or service. Businesses with large deposits, future delivery dates or unusual categories get more scrutiny. Being upfront about your business model upfront avoids a frozen account down the road.
Which is right for you
Most small businesses do perfectly well on a facilitator model. High volume, an unusual risk profile, or a need for custom pricing all point toward a traditional merchant account instead.
How funds actually move
Regardless of the model, a customer's payment moves from their issuing bank, through the card network, to your acquiring bank or facilitator, and finally into your business bank account — usually within one to two business days for a well-established account.
What triggers an account freeze
Sudden spikes in volume, a jump in chargebacks, or activity that doesn't match your stated business type are the most common triggers. A quick heads-up to your provider before a known spike, like a big sale or event, prevents most of these situations.
Switching between the two models
It's possible to move from a facilitator setup to a traditional merchant account as your business grows, or the reverse if you want simplicity. The right time to reconsider is usually when your volume or risk profile changes meaningfully.
How this fits with your POS choice
Some POS platforms are tightly bundled with a single processor, while others allow more flexibility in how your merchant account is structured. It's worth understanding which model you're being placed in before you sign up, not after.