Acquiring bank

This article needs additional citations for verification. Please help improve this article by adding citations to reliable sources. Unsourced material may be challenged and removed. Find sources: "Acquiring bank" – news · newspapers · books · scholar · JSTOR (June 2012) (Learn how and when to remove this message)

An acquiring bank (also known simply as an acquirer) is a bank or financial institution that processes credit or debit card payments on behalf of a merchant. ^[1] The acquirer allows merchants to accept credit card payments from the card-issuing banks within a card association, such as Visa, MasterCard, Discover, China UnionPay, American Express.

The acquiring bank enters into a contract with a merchant and offers it a merchant account. This arrangement provides the merchant with a line of credit. Under the agreement, the acquiring bank exchanges funds with issuing banks on behalf of the merchant and pays the merchant for its daily payment-card activity's net balance — that is, gross sales minus reversals, interchange fees, and acquirer fees. Acquirer fees are an additional markup added to association interchange fees by the acquiring bank, and those fees vary at the acquirer's discretion.^[2]