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A Merchant Service is a facility that merchants would have that would allow them to take payments in exchange for goods. For example, if you were selling clothes online, a merchant facility would allow you to accept online credit or debit card payments. Alternatively, if you are a shop owner on the high street, you would have a card terminal in your shop and this would be your merchant services provider.
You can find out more information about merchant services by visiting this following wikipedia link: https://en.wikipedia.org/wiki/Merchant_services