A merchant application is an application made to obtain a merchant account. A merchant account enables business to receive payments by debit or credit cards. The money captured from credit or debit sales is held in the merchant account before being transferred to the official business account.
Merchant account providers such as MasterCard or Visa require businesses to apply and be approved to run the account because of the potential risk of losing money every time they process a credit transaction on behalf of the business. These providers charge an application fee; some refund the fee if the account is declined.