What is an Acquiring Bank? The Acquirer's Role in Payments

More and more present-day companies need to process electronic payments. Some of them already managed to make a transition from cash-based operations to online transaction processing. Following their example, new market players are trying to find the best solutions that would allow them to process electroinc payments for their core products.

What it takes to process transactions electronically

Let us now take a look at essential components of electronic payment processing solutions. Some might associate electronic payment processing with particular devices or applications installed on these devices. However, in reality, the situation is a bit more tricky. True, when you purchase a product or service online, you are using some software or interface for that. However, through this interface, you are accessing the international payment and banking system. Connection to this system allows companies to accept electronic payments for their products.

What acquiring banks are

The main connection hub, linking a company to the banking system is its acquiring partner. People often loosely use the concept of an acquirer or acquiring bank, confusing it with an ordinary commercial bank. In fact, a commercial bank can become an acquirer, but in order to do that, it has to get a special authorization from card associations. An acquiring bank certified by Visa, MC, and/or other card networks gets the right to issue merchant accounts to businesses that want to accept electronic payments. If you have a traditional commercial account, you still have to get a merchant account in order to become a part of transaction processing world. It is through this account that all your business operations are perform