Commerce Glossary

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What is an Acquiring Bank?

ac - quir - ing bank
A bank or financial institution that accepts debit or credit card transactions for a cardholder.
How Does an Acquiring Bank work?

Acquirers/Acquiring banks are registered members of a card network, such as MasterCard or Visa, and accept (or acquire) transactions on these debit and credit card networks' behalf for a merchant. The card network connects acquiring banks to banks that issue credit cards, or issuing banks, so that a customer transaction can be verified. Whenever a cardholder uses a debit or credit card in a purchase, the acquiring bank will either approve or decline the transactions based on the information the card network and issuing bank have on record about that card holder's account.

Aside from managing all transactions that a cardholder completes with his or her credit or debit card, an acquirer also assumes full risk and responsibility associated with the transactions it processes. Because of this, the acquirer charges various fees for its services. These fees vary by acquirer, but they're commonly assessed on a routine schedule for activity such as transactions, refunds, chargebacks, and other various situations and reasons. The acquirer assesses fees on behalf of themselves, the card network, and the issuing bank.

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