Also known as the Acquirer or Acquiring Bank, this is the bank that represents all the issuing banks and posts the funds to be deposited in the merchant’s account prior to monies being collected and transferred via interchange from the various issuing banks. Merchant banks are compensated for providing these funds through the discount rate, a fee charged for the use of the money. It’s called a ‘discount rate’ because the fee is usually subtracted from credit card funds as they are deposited with the merchant. Merchant banks also share in the Interchange Fee charged by the card associations.

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