Merchant

A merchant is any business entity, a retailer, software platform, marketplace, or service provider, that accepts card payments or other electronic payment methods from customers in exchange for goods or services. In the payments ecosystem, the merchant sits between the cardholder (who initiates payment) and the acquirer (who processes and settles it).

Merchants enter into contractual agreements with acquirers (or Payment Facilitators) to gain access to card payment infrastructure. These agreements define processing rates, acceptable transaction types, chargeback thresholds, and compliance obligations. In exchange for accepting cards, merchants pay a portion of each transaction in processing fees, the Merchant Discount Rate (MDR), which is split among the acquirer, card network, and issuing bank.

Merchants are categorized by transaction volume into compliance tiers by the card networks. Level 1 merchants (those processing the highest volumes) face the most rigorous PCI DSS compliance requirements, including an annual audit by a QSA (Qualified Security Assessor). Lower-volume merchants may qualify for a SAQ (Self-Assessment Questionnaire) instead.

Merchants operating across multiple geographies face additional complexity: managing relationships with multiple Acquirers, supporting Local Payment Methods (LPMs) relevant to each market, complying with regional regulations such as PSD2 and SCA, and maintaining acceptable authorization rates across diverse card types. This complexity is the core operational problem that Payment Orchestration is designed to solve.