• A merchant services account is an account that a business holds with an acquirer in order to accept credit and debit cards in his or her business. A business cannot accept credit cards without a merchant services account.


    An acquirer is an institution, either a bank or other financial institution that provides a business with the capability to accept credit cards. This service includes a point of sale device, an authorization and capture gateway and a settlement process.

    How Merchant Account Services Work

    When a merchant swipes a credit or debit card, the information about the account is obtained from the magnetic stripe on the back of the card and sent through the payment gateway to the acquirer. The card-issuing bank provides an authorization and places a hold against that cardholder's account. The authorization code travels back to the point of sale device. This process takes approximately three seconds to complete.


    The business settles its transactions daily, sending the batch information to the acquirer. The transactions complete a process known as Interchange, in which the money is transferred from cardholders' accounts to the acquirer. The acquirer then pays the merchant for these transactions.


    Many acquirers pay a merchant up front for their batches while waiting for the transactions to complete Interchange. Because this process allows the merchant to use the funds before they are available, it is considered a line of credit. Merchant accounts are underwritten much like any other line of credit.

    Cardholder Disputes

    When cardholder disputes occur, the card-issuing bank contacts the acquirer, who represents the merchant in the dispute process. A business may lose the dispute, and money is deducted from the business's account in order to cover the disputed amount. The cardholder then receives reimbursment.


    Merchant Warehouse

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