merchant account

A merchant account is a special account at a bank. It allows e-commerce companies to make credit card payments and receive the revenues from them.

The financial fulfillment part is usuallyoutsourced and purchased as merchant services from professional financial service providers. As a rule, at least three parties are involved in the processing of a credit card transaction:

The consumer's merchant bank, the clearing house and the e-commerce company's merchant bank. Once the credit card information is received, merchant software prepares the transcations through the clearinghouse. It authenticates credit cards andverifies the card's credit limits.