Running a business today means accepting card payments — but for entrepreneurs with poor credit histories, getting approved for a merchant account can feel like an uphill battle. Traditional banks and payment processors often see bad credit as a sign of risk, leading to rejections, higher fees, or restrictive contracts.

The good news? In 2025, there are more options than ever for securing a bad credit merchant account, especially for startups and small businesses that need flexibility and fast approval.

In this guide, we'll walk you through what a merchant account is, why bad credit is a challenge, and how to find a merchant account without credit check or with more lenient requirements.

Understanding a Merchant Account

A merchant account is a type of bank account that allows your business to accept and process credit card and debit card payments. Funds from customer transactions are first deposited into your merchant account and then transferred to your business bank account.

For businesses with good credit, approval is usually straightforward. But for those with poor or limited credit history, traditional providers may consider you a "high-risk merchant" — which can complicate the application process.

Why Bad Credit Affects Merchant Account Approval

When payment processors approve a merchant account, they're essentially taking a financial risk. If your business faces chargebacks, fraud, or bankruptcy, the processor could lose money. Credit scores are one of the tools they use to gauge risk.

Reasons bad credit might lead to rejection include:

• History of late payments or loan defaults
• Previous bankruptcies
• High debt-to-income ratio
• Limited or no credit history (common for startups)

That's why finding a bad credit merchant account provider who specializes in high-risk businesses can be a game-changer.

Options for Getting a Merchant Account with Bad Credit in 2025

Thankfully, not all providers rely heavily on credit checks. Many modern payment processors offer easy approval merchant account solutions designed for startups, small businesses, and entrepreneurs with imperfect credit histories.

1. High-Risk Merchant Account Providers

These providers specialize in industries and businesses that traditional banks avoid. They often offer a merchant account without credit check or use alternative risk assessment methods.

Pros:

• More likely to approve bad credit applicants
• Experience handling high-risk industries
• Can provide tailored fraud protection and chargeback tools

Cons:

• Higher fees compared to low-risk merchant accounts

2. Third-Party Payment Processors

Platforms like PayPal, Square, and Stripe can be more forgiving with credit requirements. While they may not technically offer a full bad credit merchant account, they allow you to start accepting payments quickly.

Pros:

• Quick setup (sometimes same day)
• Minimal paperwork
• No long-term contracts

Cons:

• Account freezes can happen if transactions look suspicious
• Higher per-transaction fees

3. Merchant Aggregators

Some payment providers "aggregate" multiple businesses under one master merchant account. This reduces their need to individually assess credit risk for each business.

Pros:

• Easy approval
• Great for startups and side businesses

Cons:

• Limited control over payment processing features

Tips for Getting Approved for a Bad Credit Merchant Account

Even if you have bad credit, there are steps you can take to improve your approval chances:

• Be Transparent About Your Situation: Some providers appreciate honesty and will work with you to find solutions.
• Offer a Rolling Reserve: Agreeing to let the provider hold a percentage of your transactions temporarily can make them more comfortable approving you.
• Show Stable Business Revenue: Even with bad credit, consistent income can reduce perceived risk.
• Avoid Industries with Extra Risk: If possible, stay away from industries that already face high scrutiny, like gambling or CBD sales.
• Consider a Co-Signer or Partner: Partnering with someone who has good credit can improve your chances of getting an easy approval merchant account.

Best Bad Credit Merchant Account Providers in 2025

Here are some top providers that are startup-friendly and offer flexible credit policies:

1. PaymentCloud

Best for High-Risk Businesses

• Specializes in high-risk industries
• Works with a network of banks to find a fit for your business
• Often approves applicants with low or poor credit scores

2. Durango Merchant Services

Best for Personalized Support

• Experienced in approving bad credit merchant account applications
• Offers fraud prevention and chargeback management tools
• Customized pricing plans based on business type

3. Host Merchant Services

Best for Transparent Pricing

• Known for honest, upfront pricing without hidden fees
• Works with startups and small businesses with bad credit
• Good customer service and support

4. Soar Payments

Best for Fast Approval

• Specializes in high-risk and bad credit accounts
• Streamlined application process for quick setup
• Offers ACH and eCheck processing alongside credit card payments

5. Square

Best for Immediate Setup

• No traditional credit check for account creation
• Allows you to start accepting payments the same day
• Ideal for startups that need quick cash flow

Startup-Friendly Merchant Accounts for Bad Credit

For startups, the challenge is two-fold: no business history and possible personal credit issues. The ideal solution is finding a merchant account without credit check that still offers essential features like:

• Recurring billing
• Fraud prevention
• Integration with eCommerce platforms

Startups should look for month-to-month contracts so they can switch providers later if they find better rates or features.

How to Improve Your Chances for Easy Approval

While some providers offer easy approval merchant account options, you can still make yourself a stronger candidate:

• Keep chargebacks low by having clear refund policies
• Maintain accurate financial records
• Separate business and personal finances
• Use secure payment gateways to protect customer data

The Bottom Line

Getting a bad credit merchant account in 2025 isn't as difficult as it used to be. With the rise of high-risk merchant account providers, third-party processors, and startup-friendly services, there are more pathways to approval than ever before.

If you need a merchant account without credit check, your best bet is to look for high-risk specialists or payment aggregators that focus on business performance rather than personal credit scores. For startups, an easy approval merchant account can help you start processing payments quickly while building your credit over time.

With the right provider, you can focus on growing your business instead of worrying about payment processing roadblocks — proving that even with bad credit, your entrepreneurial journey doesn't have to be limited.