acquiringbank

An acquiring bank, or acquirer, is a financial institution that processes card payments on behalf of a merchant, enabling acceptance of credit and debit cards. The acquirer provides the merchant with a merchant account—the account that holds funds from card transactions before they are deposited into the merchant's business bank account. When a card payment is initiated, the acquirer forwards the transaction details to the relevant card network (e.g., Visa, Mastercard), which routes it to the card-issuing bank for authorization. If approved, the funds are settled through the network to the acquirer and then deposited into the merchant's account after deductions such as interchange fees and the acquirer's discount rate. The merchant typically pays various fees: a discount rate, a percentage of each sale, per-transaction fees, gateway/processing fees, and any chargeback fees.

Acquirers work with payment processors and sometimes with payment service providers (PSPs) to enable online and in-person payments. They are responsible for underwriting merchants, risk management, and compliance with rules from card networks and regulators. They must perform due diligence, monitor for fraud, and ensure adherence to PCI DSS standards for protecting cardholder data. Acquirers also handle chargebacks and dispute resolution and may set settlement schedules (e.g., daily, multi-day) and reserve requirements for risk control.

In contrast to issuing banks, which issue cards to consumers, acquiring banks do not issue cards but rather facilitate card acceptance and funds settlement for merchants. Depending on the market, acquiring functions may be performed by banks, specialized processors, or payment institutions, all operating under regulatory licenses.