Merchant Bank

A merchant bank, in the broad context of finance, refers to a specialized financial institution that provides a variety of services primarily to businesses rather than individual consumers. Traditionally, merchant banks were known for their involvement in international finance, corporate underwriting, and long-term business loans. Over time, their role has expanded to include a variety of other services that support businesses in managing their financial operations and growth strategies.

Services provided by merchant banks include:

In the specific context of payments, a merchant bank is often referred to as the "acquiring bank" or "acquirer." This is the bank that maintains the merchant's bank account (merchant account) and is responsible for processing credit and debit card transactions on behalf of the merchant. The acquiring bank contracts with the merchant, handles the settlement of transaction funds, manages chargeback and refund processes, and ensures compliance with the regulatory standards of the card networks.

Examples of prominent merchant banks include:

Merchant banks play a critical role in the economic infrastructure by providing essential financial services that help businesses grow and operate efficiently. Their services are integral to facilitating not only routine business transactions but also strategic corporate finance activities that drive larger economic developments.