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What is a merchant account?

mer - chant a - ccount
noun

A merchant account is a specialized account provided by an acquiring bank to businesses, allowing them to process payments made with credit and debit cards easily. This account is a crucial tool in ensuring smooth and secure transactions for customers, ultimately enhancing their shopping experience.

How does a merchant account work?

A merchant account is a distinctive account number provided by an acquiring bank to a particular merchant. This special account number serves as a means for the merchant to associate itself with the transaction details sent to the bank and to receive the funds from those transactions. When applying for a merchant account, businesses adhere to the guidelines established by card associations, such as Visa or MasterCard, to ensure secure and compliant transactions. Merchant accounts are subject to different types of fees, which can be structured as monthly charges, a percentage of each transaction, or a combination of both.