What Is an Acquirer and How Does the Internet Acquiring Work?

Nowadays, digital payments are growing in popularity as they are becoming a new reality. Therefore, being able to process card payments is essential for any online business’s competitiveness and profitability. For merchants to start accepting payments on their website, they need to sign a contract with an acquirer. If you’re not yet familiar with this term, this article covers everything about acquiring and how internet acquiring works.

What is a merchant acquirer?

In simple terms, an acquirer is a financial institution that handles transactions between a merchant and a customer. Keep in mind that an acquirer should be licensed with a card association (MasterCard, Visa, etc.) as well as comply with the relevant requirements (MasterCard or Visa merchant acquiring rules, for example). 

Acquirer’s role in an online transaction

The role of an acquirer is to process card transactions. But how does it work? When merchants want to process debit or credit card transactions on their business website, they need to sign a contract with an acquiring bank. Then, during the payment process, an acquirer authorizes card transactions and connects to an issuing bank on the merchant’s behalf. In banking architecture, the issuer-acquirer relation is situated between a merchant and a customer. Don’t forget that some acquiring banks partner with third-party payment providers. Merchants may need to choose a payment provider themselves, sometimes even before selecting a third-party acquirer. A merchant needs an online payment acquirer to accept payments for their company’s goods or services. However, besides selecting an acquirer, merchants often need to choose a gateway that will provide a payment window for their shop during online purchases. Both acquiring banks and payment gateway services can help secure a merchant’s transactions.

How do you choose a merchant acquirer?

Here are some recommendations that can assist you in choosing the right provider of merchant acquiring services:

• If you know the average number of payments on your website, you can calculate the expected charges of different acquirers. Moreover, every acquirer has a different system of fees. So when dealing with an acquiring bank, ensure that you are provided with a transparent list of fees and prices.
• Make sure to check if a card acquirer works with the payment gateway you are using.
• Check if the acquiring bank supports the card and payment methods you are looking for.
• Verify whether a merchant acquirer meets security standards and is PCI DSS (Payment Card Industry Data Security Standard) compliant.
• Request information about the amount of time it takes for funds to be sent to your bank account.
• When choosing between local and global card acquiring, consider whether the acquirer offers its service in your clients’ countries. Besides, make sure the acquirer supports a list of currencies your customers may use. While international acquirers cover all territories, local acquiring is more affordable and adapted to specific markets.
• Prepare all your company information before applying.

Final thoughts

Payment acquirers are the mediators between merchants and customers. To make the best choice, we recommend that you picture exactly what you are looking for and do not hesitate to ask professionals as many questions as you need.