How to Accept Payments Without Having a Bank Account
Can you survive without a checking account? Absolutely.
However, life is a lot less stressful if you do have a bank account. Even popular P2P apps like PayPal, Venmo, and Square Cash require users to connect to a bank account. Thanks to technology, you can open an online bank account through a traditional brick-and-mortar bank or eBank solutions like Due, Circle, Ally or Chime.
There are certain circumstances when you don’t have access to a bank account. It could be temporary because you moved or have to clear an identity theft issue. Or, it could be more permanent. Maybe you just tired of the fees, concerned over security, or just want to live off-the-grid.
Regardless of your reasons, you can still send and receive funds as well as pay your bills without having a bank account through the following techniques. Just a word of caution before going any further. If you’re a business owner, the IRS highly recommends in Public 583 that you open a business checking account, especially if you accept credit cards. Even if you’re a freelancer, you’re still responsible for answering to the tax man. Please talk to tax advisor to prevent any possible penalties or audits.
Cash and Checks
Cold, hard cash is one of the oldest, and probably the easiest, way to accept payments without having a bank account. You don’t have to sign up for any accounts in-person or online or worry about where to cash a check. Plus, cash is accepted everywhere.
If you’re paid through a paper check, you can cash it at the check writer’s bank. Since you don’t have an account with the bank you will have to pay a fee. You can also cash it at certain retailers or a cash checking store. More fees apply here.
To get around these fees, you could accept eChecks and have the funds transferred into a digital wallet, such as Due, instead of a traditional bank account.
Like cash, wire transfers have been a popular method for sending and receiving money. Unlike cash, you can transfer money anywhere. While money transfers may seem antiquated, this industry has evolved.
For example, you can go to Walmart and MoneyGram to schedule fast and secure money transfers to another Walmart store in the U.S. and Puerto Rico. It’s also possible to send money internationally to MoneyGram agent locations in over 190 different countries. Funds are available within minutes with minimal fees.
Western Union and TransferWise also offer online money transfers. You may need a bank account to set-up one of these accounts. Alternatives include Garanti Bank’s “money transfer without bank account” service. With this service, you can send and receive wire transfers without a bank account.
Digital and Mobile Wallets
Digital and mobile wallets are becoming an increasingly popular method to transfer money between friends or accept payments from anyone. Some of these apps, such as PayPal, still require users to have a bank account. However, there are many wallets that don’t require a connection to a bank account.
In developing countries like Kenya, M-Pesa lets customers transfer funds directly from their mobile devices by withdrawing the funds from their M-Pesa account. It simply involves handing cash to one of Safaricom’s 40,000 agents.
Prepaid cards allow you to pretty much the same things that you can a checking account. Instead of having a traditional bank account you “load” funds onto your card, which you can then spend. Unlike fully functional bank accounts you don’t need a minimum balance, there aren’t any credit checks or monthly fees, and you never spend more than you have in your account.
Bluebird by American Express and Walmart is one of the more powerful prepaid card options available. It’s a reloadable prepaid card, and mobile app, that allows you to transfer funds, capture checks with your mobile device, and enroll in direct deposits.
If you’re a business owners, you could pay employees though a Visa Payroll Card where funds are immediately added onto a Visa Debit card. It’s fast, convenient, and replaces the need for having a traditional bank account.
Not to be outdone, PayPal now offers a My Cash Card where you purchase prepaid card at participating retailers and then add the funds to your PayPal account.
Digital currencies, like bitcoin, have been around for years. However, it finally appears that the world is ready to completely embrace cryptocurrencies as a way to get paid and even make purchases – thanks to more and more retailers accepting bitcoin and ATMs that allow you to withdraw funds. More importantly, transaction fees are cheap and funds are secure and accessible almost instantly.
You can start accepting eCash by using wallets provided by Due, Circle, and Coinbase.