Sub-merchant
A sub-merchant is a seller or merchant who receives payments through a platform or marketplace — without needing their own contract with the acquirer or PSP.
Sub-merchant
A sub-merchant is a merchant who accepts payments through a parent platform (the master merchant or payment facilitator). The sub-merchant does not have a direct contract with the acquirer or card network — instead, payment processing runs through the master merchant.
The sub-merchant model is the foundation for marketplaces: each seller on the platform is a sub-merchant who is identified (KYC), verified, and enabled for payouts through the platform's PSP. The PSP ensures that each sub-merchant meets the regulatory requirements.
For platform operators, the sub-merchant model is attractive because sellers can be onboarded quickly without each individual seller having to conclude a direct acquiring contract. The PSP takes care of KYC, compliance, and payouts. The platform controls commissions and fees via the API.
Sub-merchant examples
A craftsman registers on a service marketplace. He is set up as a sub-merchant with the PSP, undergoes KYC, and can receive payments after verification.
A platform onboards 200 sellers as sub-merchants. Each receives their own merchant ID, but all run under the platform's PSP contract.
A sub-merchant receives weekly payouts from the PSP — minus the platform commission, which is automatically withheld via split payment.
Sub-Merchant FAQ
What is a sub-merchant?
A sub-merchant is a seller on a platform or marketplace who receives payments through the platform's PSP — without having their own acquirer contract.
Do you need KYC for a sub-merchant?
Yes, each sub-merchant must be identified and verified (KYC). Usually, the PSP performs this check before the sub-merchant can receive payouts.
What is the difference between a sub-merchant and a merchant?
A merchant has their own contract with a PSP or acquirer. A sub-merchant is connected to a platform and uses its PSP contract — they do not need their own.
How are sub-merchants paid out?
The PSP pays sub-merchants directly into their bank accounts — minus the platform commission and transaction fees. Depending on the configuration, payout occurs daily, weekly or monthly.
