Merchant account
A specialised business account that enables a company to accept and settle electronic card payments through an acquiring bank.
Institutional Definition: A merchant account acts as an intermediary holding account where card transaction funds are deposited before settlement into the business’s primary bank account, subject to card-scheme rules and PCI DSS requirements. It represents a contractual line of credit provided by an acquirer to a merchant, facilitating the movement of capital from the card issuer to the commercial entity.
Technical Context: In the United Kingdom, merchant accounts operate within the wider merchant services ecosystem. These accounts involve contractual relationships between the merchant, the acquiring bank, the payment processor, and global card schemes.
Etymology & Regulatory Scope
The Acquiring Bank
The financial institution that maintains the merchant account and assumes financial risk for card transactions.
Card Schemes & Compliance
Payment networks such as Visa and Mastercard provide the underlying infrastructure and require adherence to PCI DSS.