Merchant Account

AAA

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.

INVESTOPEDIA EXPLAINS '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 chanrged to a merchant by a bank for providing debit ...
  2. National Bank

    In the United States, a commercial bank chartered by the comptroller ...
  3. Merchant Bank

    A bank that deals mostly in (but is not limited to) international ...
  4. Retail Banking

    Typical mass-market banking in which individual customers use ...
  5. Bank Fees

    Many banks charge nominal fees for various services, such as ...
  6. Behavioral Modeling

    Using available and relevant consumer and business spending data ...
RELATED FAQS
  1. What is the difference between investment banks and merchant banks?

    Merchant banks and investment banks, in their purest forms, are different kinds of financial institutions that perform different ... Read Full Answer >>
  2. How do prepaid debit cards work?

    Prepaid debit cards work almost like a combination of a credit card and a checking account. Prepaid debit cards are issued ... Read Full Answer >>
  3. How do I get a higher limit on my credit cards?

    Before applying for a higher credit limit, it is important to demonstrate responsibility. One way to do this is by making ... Read Full Answer >>
  4. Where are secured credit cards accepted?

    Secured credit cards can be used just like regular credit cards wherever credit cards are accepted. Secured credit cards ... Read Full Answer >>
  5. Do prepaid Credit Cards have monthly fees?

    While prepaid credit cards differ in their fee structures, some come with fees to purchase the card, activate the card, add ... Read Full Answer >>
  6. How have low interest rates affected lease rates in the automotive sector?

    Low interest rates have contributed substantially to increased lease rates in the automotive sector. In recent years, the ... Read Full Answer >>
Related Articles
  1. Insurance

    The Rise Of The Modern Investment Bank

    Get to know a little bit about the institutions whose actions help to guide free markets.
  2. Credit & Loans

    The Evolution Of Banking

    Banks are a part of ancient history. Find out how this system of money management developed into what we know today.
  3. Entrepreneurship

    Start Your Own Small Business

    Quit your job, be your own boss and earn a paycheck. Find out what to do to make it happen.
  4. Entrepreneurship

    Reality Check: Why Startups Fail

    New ventures have only a 50% chance of making it through the first five years. Find out why.
  5. Credit & Loans

    The History Of Consumer Credit Rights

    The Fair Credit Billing Act of 1974 gave consumers the power to dispute credit card charges.
  6. Savings

    Expat's Guide To Bank Accounts In The Philippines

    You'll need an ACR I-Card and other documents to open a bank account in the Philippines. Be sure to read the fine print about how much money is insured.
  7. Forex Fundamentals

    Bitcoin Transactions Vs. Credit Card Transactions

    We provide an overview of the differences between bitcoin and credit card transactions, and the advantages of using one over the other.
  8. Credit & Loans

    The Pros & Cons Of Personal Loans vs. Credit Cards

    One is not like the other. We help you decide where to borrow money from.
  9. Budgeting

    Should You Pay Your Bills On Autopilot?

    Now that you can sign up to have your bills paid automatically online, it it a smart way to make your life more efficient? A look at the pros and cons.
  10. Credit & Loans

    How Is Cashback Profitable For Credit Card Companies?

    Cashback rewards are not as beneficial to the consumer as they might initially seem.

You May Also Like

Hot Definitions
  1. Fisher Effect

    An economic theory proposed by economist Irving Fisher that describes the relationship between inflation and both real and ...
  2. Fiduciary

    1. A person legally appointed and authorized to hold assets in trust for another person. The fiduciary manages the assets ...
  3. Expected Return

    The amount one would anticipate receiving on an investment that has various known or expected rates of return. For example, ...
  4. Carrying Value

    An accounting measure of value, where the value of an asset or a company is based on the figures in the company's balance ...
  5. Capital Account

    A national account that shows the net change in asset ownership for a nation. The capital account is the net result of public ...
  6. Brand Equity

    The value premium that a company realizes from a product with a recognizable name as compared to its generic equivalent. ...
Trading Center