What is a merchant account?

We turn to the source of all truth on the internet, Wikipedia, which has a good definition.  A merchant account is  is a type of bank account that allows businesses to accept payments by debit or credit cards. A merchant account also serves as an agreement between a retailer, a merchant bank (Acquirer) and payment processor for the settlement of credit card and/or debit card transactions.  To process a transaction through the merchant bank some base costs will always apply.  These amounts are called the interchange rates and they vary based on how the card is processed (swiped vs. keyed entry), what type of card is being used (Visa, Mastercard, Rewards, Corporate), what type of business is accepting the card (supermarket, retail, service).  See my interchange rate post for more info.