What is an acquirer in payments?
An acquirer, often called an acquiring bank or merchant acquirer, is a financial institution or payment provider that enables merchants to accept electronic payments. The acquirer provides the merchant account and manages the processing relationship between the merchant, the card networks, and issuing banks.
What does an acquirer do?
An acquirer manages the financial side of card payment acceptance for merchants. When a customer pays with a card, the acquirer sends the transaction request through the card network to the issuing bank for approval. After approval, the acquirer manages the clearing and settlement process and transfers the funds into the merchant’s account after deducting processing fees.
What is the difference between an acquirer and an issuing bank?
The issuing bank provides payment cards to consumers and maintains the cardholder account. The acquirer represents the merchant and processes card payments on the merchant’s behalf. During a payment, the acquirer forwards the transaction to the card network, which routes the request to the issuing bank for authorisation.
How do merchants choose an acquirer?
Merchants compare several factors when selecting an acquirer. Pricing structures influence many decisions because processing fees affect overall transaction costs. Businesses also review approval rates, fraud prevention tools, settlement speed, supported payment methods, and international coverage before selecting a provider.
What fees do acquirers charge?
Acquirers charge several fees linked to payment acceptance. The most common fee refers to the merchant service charge applied to each transaction. Acquirers also charge monthly account fees, chargeback handling fees, and other service related costs depending on the agreement with the merchant.