diff --git a/api-reference-v2/openapi_spec.json b/api-reference-v2/openapi_spec.json
index e637e70b8112..48739ac77f93 100644
--- a/api-reference-v2/openapi_spec.json
+++ b/api-reference-v2/openapi_spec.json
@@ -9024,6 +9024,14 @@
             "example": "y3oqhf46pyzuxjbcn2giaqnb44",
             "maxLength": 64,
             "minLength": 1
+          },
+          "additional_merchant_data": {
+            "allOf": [
+              {
+                "$ref": "#/components/schemas/AdditionalMerchantData"
+              }
+            ],
+            "nullable": true
           }
         },
         "additionalProperties": false
diff --git a/api-reference/openapi_spec.json b/api-reference/openapi_spec.json
index a23e7093a2ca..e08644d778f8 100644
--- a/api-reference/openapi_spec.json
+++ b/api-reference/openapi_spec.json
@@ -13201,6 +13201,14 @@
           },
           "status": {
             "$ref": "#/components/schemas/ConnectorStatus"
+          },
+          "additional_merchant_data": {
+            "allOf": [
+              {
+                "$ref": "#/components/schemas/AdditionalMerchantData"
+              }
+            ],
+            "nullable": true
           }
         },
         "additionalProperties": false
diff --git a/crates/api_models/src/admin.rs b/crates/api_models/src/admin.rs
index 8ef5d371aa1b..55a2444973da 100644
--- a/crates/api_models/src/admin.rs
+++ b/crates/api_models/src/admin.rs
@@ -1556,6 +1556,10 @@ pub struct MerchantConnectorUpdate {
 
     #[schema(value_type = ConnectorStatus, example = "inactive")]
     pub status: Option<api_enums::ConnectorStatus>,
+
+    /// In case the merchant needs to store any additional sensitive data
+    #[schema(value_type = Option<AdditionalMerchantData>)]
+    pub additional_merchant_data: Option<AdditionalMerchantData>,
 }
 
 /// Create a new Merchant Connector for the merchant account. The connector could be a payment processor / facilitator / acquirer or specialized services like Fraud / Accounting etc."
@@ -1637,6 +1641,10 @@ pub struct MerchantConnectorUpdate {
     /// The identifier for the Merchant Account
     #[schema(value_type = String, max_length = 64, min_length = 1, example = "y3oqhf46pyzuxjbcn2giaqnb44")]
     pub merchant_id: id_type::MerchantId,
+
+    /// In case the merchant needs to store any additional sensitive data
+    #[schema(value_type = Option<AdditionalMerchantData>)]
+    pub additional_merchant_data: Option<AdditionalMerchantData>,
 }
 
 #[cfg(all(feature = "v2", feature = "merchant_connector_account_v2"))]
diff --git a/crates/diesel_models/src/merchant_connector_account.rs b/crates/diesel_models/src/merchant_connector_account.rs
index 61f2af238ed7..e674b9b75871 100644
--- a/crates/diesel_models/src/merchant_connector_account.rs
+++ b/crates/diesel_models/src/merchant_connector_account.rs
@@ -203,6 +203,7 @@ pub struct MerchantConnectorAccountUpdateInternal {
     pub pm_auth_config: Option<pii::SecretSerdeValue>,
     pub status: Option<storage_enums::ConnectorStatus>,
     pub connector_wallets_details: Option<Encryption>,
+    pub additional_merchant_data: Option<Encryption>,
 }
 
 #[cfg(all(feature = "v2", feature = "merchant_connector_account_v2"))]
@@ -224,6 +225,7 @@ pub struct MerchantConnectorAccountUpdateInternal {
     pub pm_auth_config: Option<pii::SecretSerdeValue>,
     pub status: Option<storage_enums::ConnectorStatus>,
     pub connector_wallets_details: Option<Encryption>,
+    pub additional_merchant_data: Option<Encryption>,
 }
 
 #[cfg(all(
diff --git a/crates/hyperswitch_domain_models/src/merchant_connector_account.rs b/crates/hyperswitch_domain_models/src/merchant_connector_account.rs
index 76b7cd4a85af..a841e2d1507d 100644
--- a/crates/hyperswitch_domain_models/src/merchant_connector_account.rs
+++ b/crates/hyperswitch_domain_models/src/merchant_connector_account.rs
@@ -109,6 +109,7 @@ pub enum MerchantConnectorAccountUpdate {
         connector_label: Option<String>,
         status: Option<enums::ConnectorStatus>,
         connector_wallets_details: Option<Encryptable<pii::SecretSerdeValue>>,
+        additional_merchant_data: Option<Encryptable<pii::SecretSerdeValue>>,
     },
     ConnectorWalletDetailsUpdate {
         connector_wallets_details: Encryptable<pii::SecretSerdeValue>,
@@ -131,6 +132,7 @@ pub enum MerchantConnectorAccountUpdate {
         connector_label: Option<String>,
         status: Option<enums::ConnectorStatus>,
         connector_wallets_details: Option<Encryptable<pii::SecretSerdeValue>>,
+        additional_merchant_data: Option<Encryptable<pii::SecretSerdeValue>>,
     },
     ConnectorWalletDetailsUpdate {
         connector_wallets_details: Encryptable<pii::SecretSerdeValue>,
@@ -453,6 +455,7 @@ impl From<MerchantConnectorAccountUpdate> for MerchantConnectorAccountUpdateInte
                 connector_label,
                 status,
                 connector_wallets_details,
+                additional_merchant_data,
             } => Self {
                 connector_type,
                 connector_name,
@@ -471,6 +474,7 @@ impl From<MerchantConnectorAccountUpdate> for MerchantConnectorAccountUpdateInte
                 connector_label,
                 status,
                 connector_wallets_details: connector_wallets_details.map(Encryption::from),
+                additional_merchant_data: additional_merchant_data.map(Encryption::from),
             },
             MerchantConnectorAccountUpdate::ConnectorWalletDetailsUpdate {
                 connector_wallets_details,
@@ -492,6 +496,7 @@ impl From<MerchantConnectorAccountUpdate> for MerchantConnectorAccountUpdateInte
                 applepay_verified_domains: None,
                 pm_auth_config: None,
                 status: None,
+                additional_merchant_data: None,
             },
         }
     }
@@ -514,6 +519,7 @@ impl From<MerchantConnectorAccountUpdate> for MerchantConnectorAccountUpdateInte
                 connector_label,
                 status,
                 connector_wallets_details,
+                additional_merchant_data,
             } => Self {
                 connector_type,
                 connector_account_details: connector_account_details.map(Encryption::from),
@@ -528,6 +534,7 @@ impl From<MerchantConnectorAccountUpdate> for MerchantConnectorAccountUpdateInte
                 connector_label,
                 status,
                 connector_wallets_details: connector_wallets_details.map(Encryption::from),
+                additional_merchant_data: additional_merchant_data.map(Encryption::from),
             },
             MerchantConnectorAccountUpdate::ConnectorWalletDetailsUpdate {
                 connector_wallets_details,
@@ -545,6 +552,7 @@ impl From<MerchantConnectorAccountUpdate> for MerchantConnectorAccountUpdateInte
                 applepay_verified_domains: None,
                 pm_auth_config: None,
                 status: None,
+                additional_merchant_data: None,
             },
         }
     }
diff --git a/crates/router/src/core/admin.rs b/crates/router/src/core/admin.rs
index f78d5dca2e0d..553de8c56082 100644
--- a/crates/router/src/core/admin.rs
+++ b/crates/router/src/core/admin.rs
@@ -2080,6 +2080,30 @@ impl MerchantConnectorAccountUpdateBridge for api_models::admin::MerchantConnect
 
         pm_auth_config_validation.validate_pm_auth_config().await?;
 
+        let merchant_recipient_data = if let Some(data) = &self.additional_merchant_data {
+            Some(
+                process_open_banking_connectors(
+                    state,
+                    merchant_account.get_id(),
+                    &auth,
+                    &self.connector_type,
+                    &connector_enum,
+                    types::AdditionalMerchantData::foreign_from(data.clone()),
+                )
+                .await?,
+            )
+        } else {
+            None
+        }
+        .map(|data| {
+            serde_json::to_value(types::AdditionalMerchantData::OpenBankingRecipientData(
+                data,
+            ))
+        })
+        .transpose()
+        .change_context(errors::ApiErrorResponse::InternalServerError)
+        .attach_printable("Failed to serialize MerchantRecipientData")?;
+
         Ok(storage::MerchantConnectorAccountUpdate::Update {
             connector_type: Some(self.connector_type),
             connector_label: self.connector_label.clone(),
@@ -2114,6 +2138,23 @@ impl MerchantConnectorAccountUpdateBridge for api_models::admin::MerchantConnect
             applepay_verified_domains: None,
             pm_auth_config: self.pm_auth_config,
             status: Some(connector_status),
+            additional_merchant_data: if let Some(mcd) = merchant_recipient_data {
+                Some(
+                    domain_types::crypto_operation(
+                        key_manager_state,
+                        type_name!(domain::MerchantConnectorAccount),
+                        domain_types::CryptoOperation::Encrypt(Secret::new(mcd)),
+                        km_types::Identifier::Merchant(key_store.merchant_id.clone()),
+                        key_store.key.peek(),
+                    )
+                    .await
+                    .and_then(|val| val.try_into_operation())
+                    .change_context(errors::ApiErrorResponse::InternalServerError)
+                    .attach_printable("Unable to encrypt additional_merchant_data")?,
+                )
+            } else {
+                None
+            },
             connector_wallets_details: helpers::get_encrypted_apple_pay_connector_wallets_details(
                 state, &key_store, &metadata,
             )
@@ -2216,6 +2257,30 @@ impl MerchantConnectorAccountUpdateBridge for api_models::admin::MerchantConnect
             }
         }
 
+        let merchant_recipient_data = if let Some(data) = &self.additional_merchant_data {
+            Some(
+                process_open_banking_connectors(
+                    state,
+                    merchant_account.get_id(),
+                    &auth,
+                    &self.connector_type,
+                    &connector_enum,
+                    types::AdditionalMerchantData::foreign_from(data.clone()),
+                )
+                .await?,
+            )
+        } else {
+            None
+        }
+        .map(|data| {
+            serde_json::to_value(types::AdditionalMerchantData::OpenBankingRecipientData(
+                data,
+            ))
+        })
+        .transpose()
+        .change_context(errors::ApiErrorResponse::InternalServerError)
+        .attach_printable("Failed to serialize MerchantRecipientData")?;
+
         Ok(storage::MerchantConnectorAccountUpdate::Update {
             connector_type: Some(self.connector_type),
             connector_name: None,
@@ -2253,6 +2318,23 @@ impl MerchantConnectorAccountUpdateBridge for api_models::admin::MerchantConnect
             applepay_verified_domains: None,
             pm_auth_config: self.pm_auth_config,
             status: Some(connector_status),
+            additional_merchant_data: if let Some(mcd) = merchant_recipient_data {
+                Some(
+                    domain_types::crypto_operation(
+                        key_manager_state,
+                        type_name!(domain::MerchantConnectorAccount),
+                        domain_types::CryptoOperation::Encrypt(Secret::new(mcd)),
+                        km_types::Identifier::Merchant(key_store.merchant_id.clone()),
+                        key_store.key.peek(),
+                    )
+                    .await
+                    .and_then(|val| val.try_into_operation())
+                    .change_context(errors::ApiErrorResponse::InternalServerError)
+                    .attach_printable("Unable to encrypt additional_merchant_data")?,
+                )
+            } else {
+                None
+            },
             connector_wallets_details: helpers::get_encrypted_apple_pay_connector_wallets_details(
                 state, &key_store, &metadata,
             )
@@ -2349,7 +2431,7 @@ impl MerchantConnectorAccountCreateBridge for api::MerchantConnectorCreate {
         })
         .transpose()
         .change_context(errors::ApiErrorResponse::InternalServerError)
-        .attach_printable("Failed to get MerchantRecipientData")?;
+        .attach_printable("Failed to serialize MerchantRecipientData")?;
         Ok(domain::MerchantConnectorAccount {
             merchant_id: business_profile.merchant_id.clone(),
             connector_type: self.connector_type,
@@ -2398,7 +2480,7 @@ impl MerchantConnectorAccountCreateBridge for api::MerchantConnectorCreate {
                     key_manager_state,
                     type_name!(domain::MerchantConnectorAccount),
                     domain_types::CryptoOperation::Encrypt(Secret::new(mcd)),
-                    identifier,
+                    km_types::Identifier::Merchant(key_store.merchant_id.clone()),
                     key_store.key.peek(),
                 )
                 .await
@@ -2518,7 +2600,7 @@ impl MerchantConnectorAccountCreateBridge for api::MerchantConnectorCreate {
         })
         .transpose()
         .change_context(errors::ApiErrorResponse::InternalServerError)
-        .attach_printable("Failed to get MerchantRecipientData")?;
+        .attach_printable("Failed to serialize MerchantRecipientData")?;
         Ok(domain::MerchantConnectorAccount {
             merchant_id: business_profile.merchant_id.clone(),
             connector_type: self.connector_type,
diff --git a/crates/router/src/core/connector_onboarding/paypal.rs b/crates/router/src/core/connector_onboarding/paypal.rs
index 13b2bf16cdb5..f967f2aece3f 100644
--- a/crates/router/src/core/connector_onboarding/paypal.rs
+++ b/crates/router/src/core/connector_onboarding/paypal.rs
@@ -164,6 +164,7 @@ pub async fn update_mca(
         connector_webhook_details: None,
         pm_auth_config: None,
         test_mode: None,
+        additional_merchant_data: None,
     };
     #[cfg(all(feature = "v2", feature = "merchant_connector_account_v2"))]
     let request = MerchantConnectorUpdate {
@@ -178,6 +179,7 @@ pub async fn update_mca(
         connector_webhook_details: None,
         pm_auth_config: None,
         merchant_id: merchant_id.clone(),
+        additional_merchant_data: None,
     };
     let mca_response =
         admin::update_connector(state.clone(), &merchant_id, None, &connector_id, request).await?;
diff --git a/crates/router/src/core/verification/utils.rs b/crates/router/src/core/verification/utils.rs
index 4b8e0ac0748c..c4fbf7ab0813 100644
--- a/crates/router/src/core/verification/utils.rs
+++ b/crates/router/src/core/verification/utils.rs
@@ -87,6 +87,7 @@ pub async fn check_existence_and_add_domain_to_db(
         connector_label: None,
         status: None,
         connector_wallets_details: None,
+        additional_merchant_data: None,
     };
     #[cfg(all(feature = "v2", feature = "merchant_connector_account_v2"))]
     let updated_mca = storage::MerchantConnectorAccountUpdate::Update {
@@ -102,6 +103,7 @@ pub async fn check_existence_and_add_domain_to_db(
         connector_label: None,
         status: None,
         connector_wallets_details: None,
+        additional_merchant_data: None,
     };
     state
         .store