Payments glossary
Merchant account (MID)
A merchant account is an account with an acquiring bank that lets a business accept card payments in its own name. Each account carries a merchant ID (MID) that identifies the business to the card schemes and determines where its card takings settle.
What a merchant account is
A merchant account is not a bank account you can spend from - it is a processing relationship with an acquiring bank that authorises your business to accept card payments in its own name. Card takings clear into it, the acquirer deducts the merchant discount rate, and the net funds are paid into your ordinary business bank account. The account's merchant ID (MID) identifies your business on every authorisation, settlement record and chargeback.
Own account versus sub-merchant
The alternative to holding a merchant account is trading as a sub-merchant under a payment facilitator's master account. Facilitation is faster to join and simpler to run; a direct account brings control - your own billing descriptor on customer statements, settlement in your own name, and pricing negotiated on your own volumes rather than standardised terms. Many businesses sensibly start with one and graduate to the other.
What acquirers look at
Underwriting is a forward-looking credit decision: the bank is exposed if your business fails after taking payment. Expect scrutiny of the business model, delivery timelines and refund policy - sectors where goods or services are delivered long after payment, such as travel or pre-orders, are treated as higher risk and may carry reserves. LekkaPay arranges merchant accounts with Absa, Nedbank and any MPGS-compatible acquirer, and offers facilitation for merchants who need to start sooner.
Frequently asked questions
What exactly is a MID?
The merchant ID is the number an acquiring bank assigns to identify a business in the card system. It appears in authorisation messages, settlement files and scheme records, and it links transactions, fees and chargebacks back to the business. Larger merchants often run multiple MIDs - per store, channel or product line - to keep reporting clean.
Do I need my own merchant account to accept cards online?
No. Under a payment facilitator you accept cards as a sub-merchant on the provider's master account, which is much faster to set up. Your own merchant account brings settlement in your own name, your own billing descriptor and individually negotiated pricing - worth having once volumes justify it.
What does it take to get a merchant account in South Africa?
Acquiring banks underwrite each applicant: company registration and FICA documents, bank details, trading history and an assessment of chargeback risk. Straightforward businesses are commonly approved within days to a few weeks; higher-risk categories take longer and may carry a rolling reserve.
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