merchantAccount

MerchantAccount is a specialized bank arrangement that enables a business to accept card payments from customers. In the payments industry, a merchant account is an intermediary between the merchant, an acquiring bank or processor, and the card networks. The account holds funds from card transactions before they are settled to the merchant’s ordinary business bank account and helps manage the flow of payment data and funds.

How it works: When a customer pays with a credit or debit card, the merchant submits the transaction to a payment processor. The processor routes the authorization request through the card networks to the issuer. If the issuer approves, the transaction is authorized; at settlement time, the net funds are deposited into the merchant account and then transferred to the merchant’s bank account, usually within one to a few business days, less processing fees.

Structure and options: Traditional merchants obtain a merchant account from an acquiring bank and work with a payment processor. Some merchants use payment facilitators or processors that offer a master merchant account with many sub-merchants (aggregators). Aggregator models simplify onboarding but can involve higher effective fees and different risk controls.

Fees and pricing: Costs typically include interchange fees set by card networks, plus processor markup, monthly or per-transaction fees, and possible chargeback or assessment fees. Some providers offer interchange-plus, tiered, or flat-rate pricing.

Compliance and risk: Merchants must adhere to security standards such as PCI DSS, using tokenization and secure data handling. The merchant bears risk of chargebacks, fraud, and compliance obligations, with providers offering dispute management support.

Settlement and regional differences: Settlement timing, deposits, and risk controls vary by provider and jurisdiction, but funds generally move from the processor to the merchant account and then to the business bank account after reconciliation.