Acquirer or Acquiring Bank

Acquirer, also known as an Acquiring Bank or merchant bank, plays an important role in the payment processing ecosystem by facilitating merchants’ ability to accept electronic payments. The acquiring bank processes credit or debit card payments on behalf of merchants by securely routing the card payment data onto the relevant card scheme for authorization by the issuer.

When a customer makes a purchase using a credit or debit card, the acquiring bank is responsible for initiating the transaction process.  Once the transaction is approved, the acquiring bank ensures that funds are transferred from the customer’s account to the merchant’s account.

Acquiring banks provide merchants with the necessary tools, such as point-of-sale terminals or payment gateways, to accept and process card payments. Moreover, acquiring banks take on the risk associated with potential chargebacks and payment disputes. The relationship between merchants and acquiring banks is vital for smooth and secure electronic payment processing, enabling financial transactions to flow in the modern digital economy.

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