What Is a Merchant Account?

A merchant account operates differently from a company bank account. A business account is used to pay for operational expenditures like rent. A merchant account is exclusively used to handle credit cards.

What Is a Merchant Account?

A merchant account receives a credit or debit card payment from the card-issuing bank once it has been processed and accepted. The money is then credited to the company's bank account.

The merchant account serves as the entry point for payments in the payment processing chain. Transactions involving cardholders are transferred to a merchant account once they have been satisfactorily processed and authorized. Payments are typically sent from a merchant account to a business's banking institution via an ACH transfer within 1 to 3 days.

Merchants are given an account by payment processors where money is kept. POS systems or merchant accounts can be combined as an added feature with payment processors.