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What is a merchant?

mer - chant
noun

A merchant is an individual or business entity engaged in selling goods or services. In the world of online commerce, an eCommerce merchant refers to an entity that conducts its business exclusively through the Internet, offering a wide array of products or services to customers via digital platforms. This online-focused approach allows merchants to reach a global audience and offer convenience to customers by enabling them to make purchases from the comfort of their own devices.

How does a merchant work?

A merchant collaborates with an acquiring bank to establish and obtain a merchant account, which allows the merchant to accept credit and debit card payments. When a customer makes a purchase using a credit or debit card, the merchant shares the transaction details with its acquiring bank. The acquiring bank forwards this information through the card association network to the issuing bank of the cardholder. The issuing bank reviews the transaction and decides whether to approve or decline it, subsequently billing the cardholder for the amount owed to the merchant. This process ensures the smooth flow of payments for goods and services.