What is a Card Acquirer and What Businesses Need to Know About Merchant Acquirers

The Evolution of Merchant Acquirers 

With the development of eCommerce in the mid-1990s, the merchant acquiring sector underwent more changes. Banks like Wells Fargo and Bank of America led the charge by introducing online payment processing services. This separation of payment interfaces from the acquiring process paved the way for innovative business models such as payment service providers and aggregators, which have since developed into Acquiring as a Service (AaaS). Now, the industry features more than 1.3 million merchant acquirers across the globe, handling annual transactions exceeding $25 trillion.

Understanding the role a merchant acquirer plays is important for any business trying to determine the best solution to accept credit card payments online and in-store.

What Is a Merchant Acquirer and How Do They Work?

A merchant acquirer, also known as an acquiring bank or simply as an acquirer, is a bank or financial institution that processes credit or debit card payments on behalf of a business.

A merchant acquirer plays a crucial role in payment processing by acting as an intermediary between merchants and the card networks. When a customer makes a payment using a credit or debit card, the merchant acquirer validates the transaction, communicates with the cardholder’s issuing bank for authorization, and ensures funds transfer. This process involves facilitating the settlement of transactions, managing risks associated with card payments, and adhering to compliance standards.

Merchant acquiring allows businesses to accept card payments. When a customer pays with a card, the merchant acquirer receives the transaction information, requests authorization from the card network and issuing bank, and, upon approval, processes the payment. The funds are then transferred from the customer’s bank to the merchant’s account, minus any applicable fees.

Helpful Distinctions

Acquiring Banks vs. Issuing Banks

While the acquiring bank represents the business’s side of a transaction, the issuing bank is on the customer’s side, issuing credit or debit cards and authorizing the cardholder’s transactions. The successful interaction between these two banks ensures a smooth transaction process.

Merchant Acquirer vs. Payment Processor

Although sometimes conflated, the roles of a merchant acquirer and a payment processor are distinct. A payment processor handles the technical aspects of a transaction, such as transmitting data between the business, acquirer, and card networks. Meanwhile, the merchant acquirer is responsible for financial settlements, ensuring funds are correctly transferred from the cardholder’s account to the merchant’s account.

Choosing the Right Card Acquirer

The right merchant acquirer ensures efficient, secure, and cost-effective payment processing. By choosing the right merchant acquirer, businesses can not only ensure smooth transactions but also gain a partner that can support their growth and expansion.

Selecting a card acquirer that meets your business’s needs involves several considerations:

1. Merchant Acquiring Bank’s Reputation: Research the acquiring bank’s history, financial stability, and customer service record.
2. Pricing Structure and Fees: Understanding the fees associated with merchant acquiring services is critical. Rapyd, for instance, offers transparent Interchange++ pricing, which comprises interchange fees, scheme fees, and acquirer fees, providing clarity and savings to merchants.
3. Security and Compliance: Choose a card acquirer with robust security measures, including built-in fraud monitoring, dispute management, and chargeback mitigation tools, to protect your business and customers.
4. Global and Multi-Currency Capabilities: For businesses operating internationally, it’s essential to work with an acquirer that supports multi-currency transactions and understands the global payment landscape. Rapyd offers multi-currency business accounts that allow merchants to accept and hold funds worldwide, making it an ideal choice for global eCommerce.
5. Integration with Your Business: The right acquirer should seamlessly integrate with your existing business systems, facilitating smooth operations.

Different Industries. Unique Acquiring Needs.

With the ability to offer direct card acquiring and merchant accounts, Rapyd is in a unique position to serve the needs of a wide range of businesses with solutions for eCommerce, marketplaces, and even challenging industries like:

• Online gaming
• Affiliate & influencer marketing
• Content creators
• Online travel
• Broker-dealers
• And more

Frequently Asked Questions About Card Acquiring

What Advantages Does Rapyd Offer as a Merchant Acquirer? Rapyd is a directly licensed acquirer who can offer global payments and multi-currency business accounts. With Rapyd, merchants can access Visa, Mastercard, and a network of 900+ local and alternative payment methods to grow sales worldwide. Work with Rapyd in whatever way is best for your business, whether that is direct connectivity to Rapyd card acquiring or full gateway services. Additionally, Rapyd is one of the only direct card acquirers in the UK and Europe to offer online and in-store payment processing.

How Can a Business Start Using Rapyd’s Merchant Acquiring Services? Businesses can contact us through our website to start using Rapyd’s merchant acquiring services. Our team will guide you through the process, which involves understanding your specific business needs, setting up your merchant account, and integrating our payment processing solutions with your systems. We deliver fast, flexible onboarding and reliable, ongoing support for all merchants.

What Security Measures Does Rapyd Implement in Its Merchant Acquiring Services? Rapyd prioritizes security and compliance. We implement robust measures like real-time fraud monitoring, dispute management, and chargeback mitigation tools. Our services are compliant with PCI DSS standards, ensuring that customer payment data is processed and stored securely.

Can Rapyd’s Merchant Acquiring Services Handle High-Volume Transactions? Yes, Rapyd’s Merchant Acquiring services are designed to handle high-volume transactions. Our robust infrastructure enables us to process many transactions securely and reliably, making us a suitable choice for businesses with high transaction volumes.