Are custom apps really tied to one merchant?

javadevmtl
Tourist
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If I create a private/custom app is it really tied to one merchant? I know that my app itself is a web/api hosted on my server.

1- But does it needs to be physically deployed on my servers for each merchant?
2- Can it not just be one "single" api/server of which multiple private merchant apps authenticate to my api which can handle the multi tenancy with their own keys?

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