A merchant account is a specific type of bank account that enables businesses to accept payments from their customers using a debit or credit card. In other words, a merchant account is an agreement between three parties: a retailer, a merchant bank, and a payment processor for the purpose of processing credit and debit card payments. When a customer pays for their purchase with a credit or debit card, the money is first deposited into the merchant's account and then transferred to the company's bank account. The transfers to the bank account are usually organized daily or weekly.

Types of merchant accounts
There are several different types of merchant accounts, which can usually be broken down into two categories, and the description of each type gives a pretty clear idea of which of them is best for your business. The main categories of a merchant account are searched and entered.

A swiped merchant account is typically used when a company meets their customers in person and during that meeting a customer can swipe their card to pay for the products and services. This type of merchant account is usually described in more detail in relation to the use of said account:

Retail Merchants - conduct transactions in a retail environment. The customer's card is swiped through a terminal and typically a signature or PIN code is captured;
Wireless / Mobile - Similar to retail, but in a wireless environment with a mobile device. An example of such a dealer would be a taxi driver or a pizza delivery man;
Restaurant - similar to retail, but with an additional function - possibility to calculate tips. After the name of this type of merchant account, it is mainly used by restaurants and cafes;
Accommodation - similar to retailers, but the company can adjust the payment amount according to the additional fees. This type of merchant account is used by hotels and bed & breakfasts in case a customer has used a minibar or other extras.
Keyed merchant accounts are used when the information on the loyalty card is captured by phone or internet (or sometimes even in person) and entered by the employee himself. While this merchant account application is more time consuming and less convenient, it is also less expensive than the merchant accounts discussed earlier.

Internet or E-Commerce Merchants - for businesses that operate through a website and use the Internet Payment Gateway service to collect and process the customer's card information accordingly;
Order by post and telephone - the customer's card information is transmitted by telephone, post or Internet and processed manually either via a credit card machine or a virtual terminal;
Face to face - this type of merchant is similar to a wireless / mobile swipe merchant account, but instead of investing more money in purchasing a mobile device, it is possible to capture the required information from the customer and enter it over the phone.

Advantages and disadvantages of a merchant account
While selecting the most appropriate type of merchant account based on the intended application is critical to the best experience, there are some general pros and cons that need to be discussed.

Advantages:

Increase in sales - through greater convenience compared to check or cash payments;
Faster transactions;
Security - no risk of theft or accidental mistakes by employees when handling cash;
More choice - the more payment options you offer your customers, the easier it is for them to shop with you.
Ability to accept credit or debit cards with multiple currencies.

Disadvantage:

Cost - typically a company has to pay for every transaction;
Delay - customer funds are deposited into the merchant account first and only later transferred to the commercial bank account;
Fraud - There is always a risk of identity theft or internet fraud;
Chargebacks - It's easy for customers to request a chargeback, especially if the money is still in the merchant's account.