Connected Account
Definition
A seller account a platform creates and manages inside its payment provider to receive funds and be paid out.
A connected account is a seller or service-provider account that a platform creates and manages inside its payment provider to receive funds, hold a balance, and be paid out — without the seller holding an independent merchant account. The platform onboards and verifies the connected account, controls its capabilities (accepting charges, receiving transfers, being paid out), and may apply reserves or holds. Depending on the funds-flow model, the connected account can be the merchant of record for its own transactions or settle behind the platform's merchant of record.
A connected account is how a platform holds and moves money on a seller's behalf without that seller opening their own merchant account. It is the unit a platform onboards, verifies, gates by capability, and pays out — and the unit that can go into a negative balance when a refund or chargeback lands after payout.
The term is closest to a sub-merchant, but the framing differs: a sub-merchant describes the card-network relationship under a payment facilitator, while a connected account describes the provider-side account object a platform operates. For how connected accounts are run in practice — onboarding, payout holds, reserves, split payments, and dispute liability — see the marketplace split-payment operations runbook.
Related terms
Payment Facilitator
A Payment Facilitator (PayFac) is a company registered with card networks that c...
Rolling Reserve
A rolling reserve is a percentage of a merchant's processed transaction volume w...
Split Payment
A split payment divides a single buyer payment across more than one recipient at...
Sub-Merchant
A sub-merchant is a business that accepts card payments under a payment facilita...