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Merchant Configuration Guide v1.2

Added on:  08/25/13     Updated on:  03/15/19
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This guide is designed to assist users with the tasks around merchant on-boarding - initial merchant setup. It explains the notion of merchant hierarchy, defines merchant settings and covers all parameters of the merchant profile.

Intended Audience

This guide will be useful for administrative users that configure merchants for both processing and remittance.

Merchant Tier Structure

From the transaction processing perspective, a business of a merchant can be organized as a single-tier, two-tier and three-tier hierarchy. The configuration of the given merchant in the system is going to depend on the tier structure of the merchant’s business.

Single Tier

An example of a single-tier merchant would be a single-location store with a single card-terminal. Another example is a website or an online store, which handles all of the processing in the same way.

single-tier merchant structure

Two Tier

An example of a two-tier merchant would be either a single-location store with multiple card-terminals or a multi-location store with a single card-terminal in each of them.

two-tier merchant structure

Three Tier

An example of a three-tier hierarchy would be a multi-location supermarket with multiple card-terminals in each of the locations.

three-tier merchant structure

There are two objects within the system used to represent various tiers of the merchant’s business:

  • merchant - parent entity, which groups together accounts
  • account – child of merchant, representing a unit of business (location, store, department) or a terminal

The hierarchy mapping is implemented as follows:

  • In the single-tier scenario, the merchant is going to represent the both the business itself and its single terminal (when applicable).
  • In the two-tier scenario, the merchant is either going to represent a store/location and the account - a card-terminal, or the merchant is going to represent a corporate entity owning the stores and the account - each of the stores/locations.
  • In the three-tier scenario, the merchant is going to represent a corporate entity owning the stores and the account is going to represent both stores/locations and terminals within these stores. For example: if there are three stores each having 4 terminals, there will be a total of 12 accounts setup.

Merchant Settings

There are two major groups of settings maintained within the system - processing settings and remittance settings. Depending on the business context, both groups of settings (processing and remittance) can be maintained on either merchant level or account level. This is done to accommodate various types of business needs.

Processing Settings

Processing settings define how transactions are processed. These settings include configurations of provider profiles used to process transactions, as well as various types of settings around authorized amount is withdrawn from the card holder’s account and transferred to merchant’s account. The general practice is to do this at the end of the business day. There are two possible settlement mechanisms commonly referred to as terminal capture and host capture: When terminal capture is used, the information about each transaction to include in settlement has to be supplied at the settlement time (generally through a settlement file). When host capture is used, the underlying processing system (the host) keeps track of all of the transactions and it is usually sufficient to simply send a settlement message without including transaction details. " >settlement, cut-off times, etc.

Remittance Settings

Remittance settings define how remittance processing is going to happen and how funding of the merchant is going to occur. These settings include deposit account information (where funds are sent) reserves, merchant fees, etc.

Settings Scope

All of the processing as well as remittance settings can have one of two possible visibility scopes: merchant scope or account scope. Some settings are only meaningful at the merchant level and they are generally referred to as processing information or remittance information respectively; while some other settings can be defined at either merchant level or account level, and they are referred to as processing configuration or remittance configuration.

To distinguish the settings defined at the merchant or account levels a special marker (letter) is added to the section with settings as an aid on the user interface. Letter M designates that the settings are defined at the merchant level, while letter A designates that the settings are defined at the account level.

For processing and remittance information the settings are always defined at the merchant level and will always have letter M as a marker of the respective section; while for processing and remittance configurations the marker will show either M or A depending on the scope of settings configured for this particular merchant (generally dependent on merchant profile).

Merchant profile

Merchant profile is a set of parameters that are used to govern the initial setup of the merchant with respect to its specific business requirements.

Merchant profile is comprised of 5 parameters, which determine how processing and remittance settings are configured and on which level merchant vs account.


Defines whether the business is a multi-location / multi-terminal merchant or single-location / single-terminal merchant.

  • Single - everything is configured at a merchant level. Other parameters in the profile are ignored.
  • Multiple - multiple accounts will be set up. The settings are configured based on the remaining parameters within the profile.


Defines whether a single provider profile is going to be used for all locations of the merchant or each location is going to use separate provider profile.

  • Single - one provider profile is used for all accounts under a merchant, i.e. the provider profile is set at the merchant level.
  • Multiple - different provider profiles are used for every account under a merchant, i.e. the provider profile is set at the account level.


Defines the number of deposit accounts to use during the remittance of funds.

  • Single – regardless of the number of MIDs or accounts involved, all processing revenue is funded into a single deposit account. All of the remittance settings are configured on the merchant level.
  • Multiple – processing revenue of each account is deposited into a separate deposit account. All of the remittance settings are configured on the account level.

Monthly Fees

Defines how the monthly fees are charged.

  • Per Merchant - monthly fees are only charged once regardless of the number of the accounts under a merchant.
  • Per Account - monthly fees are charged for each of the accounts setup under a merchant.