What is an acquirer?
The acquiring bank or acquirer is a financial institution that enables merchants to accept online payments by opening merchant accounts for them. Being registered PCI DSS-compliant institutions, acquirers handle transactions on behalf of merchants, ensuring smooth and secure processing. Basically, the acquirer acts as a go-between for the merchant and the card network by managing all card transactions on behalf of the first.
The main acquirer’s tasks are:
- Sending authorisation requests
- Transferring funds to merchant accounts
- Holding and sending paper/electronic documents confirming the transactions
If the payment was successful, the acquiring bank guarantees the merchant the receipt of money for this payment. Likewise, if the merchant cancels the payment for some reason and wants to return the money to the customer, the acquiring bank will process the refund. Since the acquirer evaluates the risk for each transaction, the fees may vary depending on the services provided.
How to open a merchant account with an acquirer?
When you conclude a contract with an acquirer, it will provide you with all the necessary hardware and software to accept and process debit/credit card transactions. However, you should note that by entering into an agreement with an acquiring bank, you agree to abide by the rules and restrictions established by the card network that issued the license to that bank. Since the acquiring bank assumes all the risks associated with merchant’s transactions, before providing you with an account, it will conduct a thorough check of your business against several criteria, including:
- Your field of business
- Business history
- Personal credit history of the business owner
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It’s difficult to predict whether your merchant account application will be approved and how long the acquirer will consider the request. Banks usually prefer not to cooperate with high-risk businesses or startups to avoid possible problems, including chargebacks. Plus, acquirers charge various fees for providing payment processing services, such as setup fees, monthly fees, transaction fees, and others. The higher the risk level of the business, the higher the fees. Therefore, before cooperating with an acquiring bank, we recommend that you evaluate all the fees and make sure these costs are bearable.
Are there alternative ways to get a merchant account?
As you can see, opening a merchant account with an acquiring bank requires a lot of paperwork and audits. But the payment industry is moving forward and offers merchants many other options to get a merchant account. For example, you can enter into a contract with an ISO/MSP that will provide you with a merchant account or a payment service provider (PSP) that will offer you its merchant account to process your transactions. Both options are suitable for fast and efficient card payments processing, but the final choice should be made based on your business needs.
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