A Merchant Account is a type of bank account that allows businesses to accept and process electronic payment card transactions. This account serves as an agreement between the merchant, the acquiring bank, and the payment processor for the settlement of card transactions.
When a customer pays with a credit or debit card, the funds are first deposited into the merchant account and then transferred to the business’s regular bank account. It is important to note that the funds in a merchant account are not accessible directly by the merchant. The merchant account is only a temporary holding place for funds before they are transferred to the merchant’s regular bank account.
Having a merchant account is a requirement for any business that wants to accept card payments, and the terms and fees associated with the account can vary widely between different acquirers and payment processors.