Why You Need An Acquirer To Process Payments | SecurionPay

Why You Need An Acquirer To Process Payments

What is acquirer

There are several things you need to do before you start accepting payments on your website, and one of them is signing a contract with the acquirer. But what exactly is an acquirer, and why do you need one?

The acquirer – also known as a credit card bank, acquiring bank, or merchant – is a bank or financial institution that’s licensed as a member of a card association (like Visa or Mastercard), that creates and maintains the merchant’s bank account. Both Visa and Mastercard have their regulations and lists of compliance requirements that applicants need to fulfill before they can become an acquirer. This is why some acquirers offer just a single card the merchant can accept, as they don’t have network rights from the other major payment processors.

The acquirer can also play a role of a settlement bank that facilitates the communication and settlement of merchant payments.

What is the role of the acquirer in the payment process?

Merchants that want to accept credit and debit card transactions on their website need a merchant account. They get one signing a contract with an acquiring bank. Then, during the payment process, the acquirer authorizes or rejects card transactions and connects to the issuing bank (What is an issuing bank?) on the merchant’s behalf. If the purchase is approved, the funds are deposited into the merchant’s account.

So, after getting the card information from the payment gateway, an acquirer is responsible for:

authorization — asking the issuer whether the card is valid and there are sufficient funds in the account to complete the transaction
authentication — an optional verification of the cardholder’s identity, which is carried out after typing in the card details during a purchase. Authentication are usually performed using 3D Secure.

Read more about the entire payment process: Online payments in a nutshell: A guide for beginners

Some major acquiring banks also take on the responsibility of a payment service provider and deliver payment processing solutions. Some banks provide a full-service offer and play the role of the issuing bank, acquiring bank, and payment service provider in one place. However, an acquirer can also partner with third-party providers to deliver payment processing services.

How to choose the right acquirer

Your choice of an acquirer should be based on whether the bank supports your business model. But that’s not the only factor you need to consider. There are also the following:

The types of cards the acquirer supports — make sure they have all the card networks you accept in their portfolio. Also, ask for other payment methods if you need them.
Locations and currencies the acquirer supports — does the list include the country your company is registered in? Make sure the acquirer supports the currencies you want to accept on your website.
The average amount per transaction. This will help you calculate how much you’ll be charged for each transaction. Note that an acquirer may charge a merchant varying fees, which will be detailed in their agreement. Fees are charged to cover the costs associated with network processing and merchant account-related services.
The average number of transactions. Speaking of pricing, check the rates thoroughly to ensure you won’t have to pay extra monthly fees, which can be costly, especially in early stages. Plus, if you run a business that processes numerous daily transactions, you can negotiate rates.
Does the acquirer work with the payment gateway you’re considering?
If you need to, ask for supporting recurring payments.
Responsive support. You need to be assured that any payment issue will be quickly addressed.

What about security?

Acquiring banks also assume the risk and responsibility for processed transactions. This is why the acquirer charges various fees (usually a percentage of total merchant’s sales) for services such as transactions, refunds, and chargebacks.

It’s also important to note that online transactions are always vulnerable to data breaches, so all parties involved in the credit and debit card payment process, including the acquiring bank, must follow current security standards for fraud prevention. Such standards can be found in the Payment Card Industry Data Security Standard (PCI DSS), so make sure the acquirer is fully PCI-compliant and financially regulated by a Financial Supervisory Authority.

This is why we recommend that you choose an acquirer that offers anti-fraud solutions and fraud prevention tools that will save your business from cyberattacks and fraudulent activity.

Key takeaways

The acquiring bank is the financial institution that maintains the merchant’s bank account.
A merchant that wants to process credit and debit card transactions or other online payment methods needs to sign a contract with the acquirer.
The acquiring bank authorizes or rejects card transactions and connects the issuing bank to verify whether the card is valid and there are sufficient funds to complete the transaction.
Some acquiring banks provide payment processing solutions.

Looking for a merchant account? Why not let us take care of it for you? Contact us today and start giving your customers a smooth and uninterrupted payment processing experience.

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Sandra Wróbel-Konior

A well-established Content Marketing Specialist with a tech-savvy personality, experience in writing, and a passion for reading. Staying up to date with the latest technology and social media trends, in love with GIFs and craft chocolate.

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