"Merchant not authorized" error

I’m building a custom POS application using the Square Terminal API (not a website checkout — this is a staff-facing point-of-sale system). My application needs production Terminal API approval. My Application ID is sq0idp-Yo_LMiKWwU5QbCsHJgRwqQ and Merchant ID is MLYVXB8BMWGN5. Can you confirm whether my application needs to go through a production approval/review process to enable Terminal API checkout creation?

I need POST /v2/terminals/checkouts enabled for production on my account

Have you read our OAuth overview and permissions reference?