Acquiring Bank
A bank or financial institution that accepts debit or credit card Transactions for a cardholder.
How Does an Acquiring Bank Work?
Acquirers/Acquiring
Banks are registered members of a card network, such as MasterCard or
Visa, and accept (or acquire) Transactions on these debit and credit
card networks' behalf for a Merchant. The card network connects
Acquiring Banks to banks that issue credit cards, or Issuing Banks, so
that a customer transaction can be verified. Whenever a cardholder uses a
debit or credit card in a purchase, the Acquiring Bank will either
approve or decline the Transactions based on the information the card
network and Issuing Bank have on record about that card holder's
account.
Aside from managing all Transactions that a cardholder
completes with his or her credit or debit card, an Acquirer also assumes
full risk and responsibility associated with the Transactions it
processes. Because of this, the Acquirer charges various fees for its
services. These fees vary by Acquirer, but they're commonly assessed on a
routine schedule for activity such as Transactions, refunds,
Chargebacks, and other various situations and reasons. The Acquirer
assesses fees on behalf of themselves, the card network, and the Issuing
Bank.