DEFINITION of 'Merchant Account'

A type of business bank account that allows a business to accept and process debit and credit card transactions. Merchant accounts are necessary accounts for many businesses, and are essential for online businesses. There are different types of merchant accounts to choose from for businesses. For instance, some merchant accounts are designed specifically to handle online sales.

BREAKING DOWN 'Merchant Account'

A merchant account is an agreement made between the business/seller, the bank where the merchant account is held and the payment processor to settle all transactions made by debit and credit cards. The fees associated with these accounts are usually in the following categories: monthly, discount rate and transaction. The rate that a business is charged for debit and credit card services provided by its merchant account is called a merchant discount rate.

RELATED TERMS
  1. Merchant Discount Rate

    The rate charged to a merchant by a bank for providing debit ...
  2. Merchant Agreement

    A contract between a business and a credit card service provider.
  3. Per Transaction Fees

    An expense a business must pay each time it processes a customer’s ...
  4. Processing Date

    The month, day and year when a merchant’s bank processes a credit ...
  5. Night Depository

    A bank drop box where merchants can deposit their daily cash, ...
  6. Authorized Transaction

    A credit card purchase for which the merchant has received approval ...
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RELATED FAQS
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