A merchant account is a type of bank account that allows a seller, known as the merchant, to accept payments by debit or credit cards. A merchant account is established under an agreement between an acceptor and a merchant acquiring bank for the settlement of payment card transactions. In some cases a payment processor, payment service provider, independent sales organization (ISO), or member service provider (MSP) is also a party to the merchant agreement and can act as middle man between the merchant and the bank.

Whether a merchant enters into a merchant agreement directly with an acquiring bank or through an aggregator, the agreement contractually binds the merchant to obey the operating regulations established by the card associations.

A high-risk merchant account is a business account or merchant account that allows the business to accept online payments though they are considered to be of high-risk nature by the banks and credit card processors. They will typically pay higher transactions fees if they are accepted at all. The industries that possess this account are adult industry, travel, Forex trading business, gambling, and multilevel marketing businesses. "High-Risk" is the term that is used by the acquiring banks to signify industries or merchants that are involved with the higher financial risk.

Since credit cards were developed in the 1960s, the earliest methods, submitting credit card slips to a merchant processing bank by mail, or by accessing an Automated Response Unit (ARU) by telephone, were initially used but have long been overshadowed by electronic devices. These early methods used two-part forms and a manual device for mechanically imprinting the embossed card number information onto the forms. This was done by a merchant imprinting their customer's card with a credit card imprinter to create a customer receipt and merchant copy. These copies would be taken to the merchant acquiring bank for processing.

Credit and debit card transactions are sent electronically to merchant processing banks or payment service provider for authorization, capture and deposit. Various methods exist for presenting a credit card sale to "the system." In all circumstances either the entire magnetic strip is read by a swipe through a credit card terminal/card reader, a computer chip is read (an "EMV") or is captured using near field communication (NFC) technology or is entered into a website.

A credit card terminal is a stand-alone piece of electronic equipment that allows a merchant to swipe or key-enter a credit card's information as well as additional information required to process a credit card transaction. They may be connected to Point of Sale systems and typically have a keypad and network connection and may have a built-in printer.

An ARU (also known as a voice authorization, capture and deposit) allows the manual keyed entry and subsequent authorization of a credit card over a cellular or land-line telephone. With this method, a merchant typically imprints their customer's card with an credit card imprinter to create a customer receipt and merchant copy, then process the transaction instantaneously over the phone.

A payment gateway is an e-commerce service that authorizes payments for e-businesses and online retailers. It is the equivalent of a physical POS (point-of-sale) terminal located in most retail outlets. A merchant account provider is typically a separate company from the payment gateway. Some merchant account providers have their own payment gateways but the majority of companies use 3rd party payment gateways. The gateway usually has 2 components: a) the virtual terminal that can allow for a merchant to securely login and key in credit card numbers or b) have the website's shopping-cart connect to the gateway via an API to allow for real-time processing from the merchant's website.