What is an acquirer?

An acquirer is a financial institution that buys the rights to manage a merchant’s bank account. With the account, a merchant can accept credit and debit card payments from various cards such as American Express, Mastercard, Visa, Discover, China UnionPay, etc.

Why do you need an acquirer?

You need an acquirer to take card payments. Most acquirers support debit cards and credit cards from Visa and Mastercard. Some acquirers support other card networks such as eftpos, American Express, and JCB.

Merchant acquirer and electronic payments

An acquirer is also known as a merchant bank, an acquiring bank, or a merchant acquirer. Essentially, the acquirer authorizes credit card payments from clients and connects the issuing bank for the merchant.

When a client pays the merchant using a credit or debit card, the acquirer must be contacted to process and clear the payment. The type of payments that the merchant acquirer accepts depends on their processing relationships with card companies.

If the acquirer only has the rights for one card processor, Other card processors will not be accepted. Most acquirers enter into processing relationships with a network of providers, giving merchants a user-friendly experience for accepting card payments.
When processing the electronic payment to the merchant’s bank account, the acquirer specific charges outlined in the acquirer-merchant agreement. The fees can be per month or per transaction and cover the costs associated with network processing.

Role of the Acquirer in the Payment Process

The acquiring bank creates and manages the merchant account. When a client pays with a credit or debit card, the acquirer approves or rejects the transaction based on the information received from the card network and issuing bank.

Once a transaction is made, the acquirer receives an authorization request and forwards the information to the issuing bank for approval. After it’s approved, the payment is deposited in the merchant’s bank account. If the transaction is denied, payment goes back into the client’s account.
The acquirer also takes on risks for processed transactions, such as card chargebacks, card reversals, and card refunds.

How to choose a merchant acquirer

Here’s what to look for when opening a merchant account with an acquiring bank.

• Do they offer what you need?
  Before you look for a merchant acquirer, make a list of what you from them. This could include the preferred cards to accept, whether to take recurring payments, and whether to take international payments.
• Are they a good fit?
  Some acquiring banks may decline work with merchants they consider high-risk. An acquiring bank’s website provides details on who they choose to work with.
• Do they provide good customer service?
  In case of issues, it’s better to work with acquiring banks that provide good customer service and are clear about their hours of operation. Check reviews to ensure they’re able to help companies smoothly navigate challenges.

Examples of acquiring banks

Wells Fargo, HSBC, JPMorgan Chase, and Bank of America are all acquiring banks. Companies can find an acquirer in their region by searching local databases run by card schemes like Visa (e.g. Australia, Singapore) and Mastercard (e.g. Australia, Singapore, UK, US).