What is an Acquiring Bank?
Acquiring banks are also often referred to simply as acquirers. These are financial institutions that are part of the card network (Visa and Mastercard). They accept transactions on these networks on behalf of the merchant. The card network connects the acquiring bank with the issuing bank in order to verify the transaction and execute it. Every time the cardholder wants to buy something with their credit or debit card, the acquiring bank either confirms or rejects the transaction based on the data that the issuing bank transmits through the card network.
Cards acquiring is also important because the acquiring bank does more than just manage all the transactions that the cardholder makes with their bank card. The acquirer also assumes responsibility for all risks that arise in the processing of transactions. For this reason, an acquirer in credit card charges a fee for its services. The fee may differ depending on the acquirer but is usually calculated according to the type of transaction being processed. The acquirer collects the commission on its own behalf, as well as on behalf of the issuing bank and the card network.