merchant accounts

Industry Terms: Merchant Account [2023 Update]

Posted: April 25, 2012 | Updated: February 10, 2023

This is the latest installment in The Official Merchant Services Blog’s Knowledge Base effort. Well we want to make the payment processing industry’s terms and buzzwords clear. We want to remove any and all confusion merchants might have about how the industry works. Host Merchant Services promises: the company delivers personal service and clarity. So we’re going to take some time to explain how everything works. This ongoing series is where we define industry related terms and slowly build up a knowledge base and as we get more and more of these completed, we’ll collect them in our resource archive for quick and easy access. Today’s term is:

Merchant Account

A merchant account is a specific kind of bank account that allows businesses to accept payments by payment cards. These are typically debit or credit cards, but can also extend to EBT cards, checks, and gift cards. A merchant account is established under an agreement between an acceptor and a merchant acquiring bank for the settlement of payment card transactions. In many cases a payment processor like Host Merchant Services, is also a party to the merchant agreement. Whether a merchant enters into a merchant agreement directly with an acquiring bank or through a payment processing specialist such as Host Merchant Services, the agreement contractually binds the merchant to obey the operating regulations established by the card associations.

The best known card associations are Visa, MasterCard, American Express, Discover, Diners Club, JCB and China UnionPay.

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