Credit Card Acquiring

Credit card acquiring is the process of collecting card-based payments that have been accepted by stores or retailers. When you go to a store, make a purchase and pay using your credit card, your cardholder information is first sent to the merchant’s acquiring bank/processor for routing through the card network, and then sent to your issuing bank for approval. Through card acquiring, the acquiring bank/processor will aggregate and separate payments and then send these to the customer’s respective card issuers. Behind each seemingly instant transaction in card acquiring is a complex process that results in the consumer card payment either being authorized or declined. The acquiring bank is also known as a merchant acquiring bank or simply the “acquirer”. They are a bank or financial institution that processes credit and/or debit card payments for merchants via card networks. An acquiring financial institution has a contract with the businesses it processes credit cards for. It deposits the daily transactions into the merchant’s account as well as takes out the credit card processing fees, including interchange and acquirer fees, at the end of the month. The acquiring bank takes on all of the risk associated with approving credit card transactions. They either approve or reject each customer transaction, using information stored in the customer’s account by the credit card issuer. They also handles clearing the accounts and performing any chargebacks.