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How Does Card Acquiring Work?

If you've had a passing knowledge of payment processing, you've probably heard the term "card acquiring" be thrown around a lot. Card acquiring is done by, you guessed it, card acquirers. These individuals or groups focus on being the middleman between the bank accounts of whoever is making a payment and whoever is being paid. Different banks don't just release and deposit funds willy-nilly. Proper channels need to be used, and card acquirers work as the broker between two financial institutions or even between two customers at the same bank.

What do card acquirers do?

As soon as a credit or debit payment is made online, card acquirers begin to get to work. The acquirer will first authorize the payment and connect the bank from which money will be given (issuing bank) to the bank that will be receiving the money (acquiring bank). By being a part of the bank's networks, card acquirers can quickly determine if a customer has the funds necessary to make a purchase, and then either accept or deny the payment based on that information. Once a purchase has been authorized and approved, funds will be moved from the issuing bank into the merchant's account at the acquiring bank, and can even be further forwarded to their proper bank account at any particular institution.

Are there other concerns?

As simple as it might seem, a lot is going on behind the scenes of card acquiring services. A high degree of security is exercised when processing customer and merchant data so everybody's privacy is maintained. Neither the customer nor the merchant has access to more information than is absolutely necessary to conduct business. The card acquirer also has security measures in place to avoid breaches from any unauthorized third parties. This way, trustworthiness is ensured, and nobody will be scammed out of money before the day is done. These high levels of security are what allow banks to trust acquiring services in the first place, since they are also wary of their own infrastructure being compromised should anything go wrong.

The next main concern anyone looking for an acquiring bank is that the options have opened up greatly in the past few years. It's referred to as the commoditization of the acquiring bank service. In the past, only a few banks had the infrastructure and reputation necessary to process payments, but now, the barrier for entry is much lower, thanks to advances in technology and entrepreneurial spirit. This means there's an ocean of different choices out there, all with varying levels of security, fees, and overall user experience. The concern here is that a payment processor should be chosen much more carefully than before in this new acquiring landscape.


There you have it. That's a crash course in card acquiring. The merchant's main account doesn't necessarily have to be an account at the acquiring bank, but a merchant account will be set up at the acquiring bank to secure the funds are at the bare minimum. Any and all transactions and transaction information is carefully encrypted, while the acquirer does their work behind the scenes.

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