Required financial agreement for a merchant to accept credit cards as payment for their goods and services. The merchant must generally submit an application to a banking institution (known as an "acquiring bank") in order to establish this account. Once the account is established, the merchant is issued a "Merchant ID" and a "Terminal ID". These ID numbers respectively serve to uniquely identify a merchant within the financial network and to uniquely identify different POS "terminals" within that merchant's environment. * this alone does not provide real time credit card authorization.
a commercial bank account established between a business (the merchant) and a bank. A merchant account enables a business merchant to accept credit card payments and transactions from your customers.
A merchant account is a relationship and trust you have with a bank that has agreed to allow you to charge people's credit cards. The bank is responsible for debiting the funds from the customer and depositing it into your account. There is usually a processor that is involved that processes the credit cards for the bank and lets them know the funds are available. When you are given a merchant account from a company, they are relying on you to uphold your promises to your customers by delivering the products and/or services to them in a timely manner. Merchant providers are taking a risk to allow you to take credit cards under their name. There are 2 kinds of merchant account providers; bank or non-bank merchant account provider. Banks tend to be looked upon as more reliable and secure but they also tend to be more selective. Non-bank providers may be reputable and secure and tend not to be as selective as banks but their rates will often be higher. The non-bank providers themselves go to banks to get a merchant account on your behalf. They accept the risk of their customers not paying or being fraudulent.