What is a Merchant?
If you're buying or selling something online or offline, you've probably heard the word merchant and want to know the online merchant definition. What are merchants? Long before the development of eCommerce and the era of online payments, a merchant was an ordinary seller who offered their goods to customers in their shops or on the streets. Today, experts define merchants as businesses that accept payment cards for their goods or services. An eCommerce merchant is an online merchant that only accepts payments online.
However, a company cannot just start accepting payments right away. To do this, the merchant enters into an agreement with the acquiring bank and receives a merchant account where it can receive payments from credit and debit cards. There are different types of merchant accounts for businesses that accept payments online or offline (with a POS terminal).
Each time a buyer uses their credit or debit card to purchase an item, the seller transmits the transaction information to their acquiring bank. The acquirer checks the card by making a request to the buyer's issuing bank. The issuing bank checks if the card details are correct and if there are enough funds in the account. If everything is in order, it confirms the payment and issues an invoice to the cardholder or rejects the payment and sends a notification.