Acquiring Bank Definition

Merchant Account Acquiring Bank Explained:

What is an Acquiring Bank? Sometimes simply called an “Acquirer,” an Acquiring Bank or Acquiring Financial Institution is the entity that supplies the actual merchant account that allows a merchant to accept credit card payments. Acquiring Banks primarily serve a back-end role and generally do not service the merchants directly. Instead, the majority of Acquiring Banks only facilitate the exchange of funds between card-issuing banks and merchants, and rely on third-party sales organizations to sell the accounts and supply customer service. In a few rare cases, Acquiring Banks not only serve as a processor but also market, sell, and service the merchant accounts directly.

Acquiring banks collect a small set fee for each credit card transaction and play a minimal role in the overall cost of the merchant processing fees. The majority of the costs associated with accepting credit cards come from Interchange fees and processor/provider markup fees.

Acquiring Banks also assume much of the risk in the credit card processing network because merchant accounts are a line of credit and not a holding account like a checking or savings account. In the event a merchant becomes insolvent, and suffers fraud or chargebacks, the acquiring bank suffers the loss if the funds cannot be recovered either from the merchant or the customer. For this reason, most Acquiring Banks require any individual/entity wishing to accept credit cards to undergo a credit check and/or supply financial data before establishing a merchant account.

Acquiring Bank Video Explanation

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Why I'm Qualified to Write About Credit Card Processing and Merchant Account Services

I'm a former credit card processing sales director who left the industry because I didn't like how it takes advantage of small business owners. It feeds like a leech on businesses and thrives by imposing fees that are nearly impossible to comprehend. Seeing a need for change, I left and built this website help business owners better understand the industry, research merchant services providers, and get refunds of excessive merchant account fees. My experience of working "behind the curtain" in the industry, and using that knowledge for good, has resulted in millions of dollars returned to hard-working small business owners as well as enterprise-level companies.

From the time that I starting working in the merchant services industry to when I left to create this website, I've been on the pulse of payments for nearly 15 years. It didn't seem fair to keep this "insider" knowledge to myself. To lift the fog, I've reviewed hundreds of companies, read thousands of user reviews, and learned the pricing tricks of every provider. If you have questions about credit card processing, you can find the answers on this website.

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