Why The Acquirer is Necessary for Payments Processing?

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Acquirer-Payments-ProcessingThe acquirer plays a crucial role in accepting payments online. The acquirer is often regarded as the internet acquiring bank, credit card bank, or any merchant bank. An acquirer usually is any financial institution that possesses the membership of a card association (for example, MasterCard or Visa). Its main function is to create and support the bank account. More information about the internet acquiring bank can be found here. To become an eligible acquirer one should comply with requirements and rules of Visa or Mastercard. Besides, it is necessary to sign a contract with an acquirer. This contract is proof of partnership.

The role of an acquirer in the process of payment

The contract with different acquiring banks is necessary once merchants wish to complete debit or credit transactions. After signing the contract, representing the merchant, an acquirer confirms the transaction and links the issuing bank.

If a merchant is willing to buy something online via debit or credit card, the acquiring bank makes the final decision on whether to authorize the transaction or not. This decision is often based on the data provided by a certain card network and the issuing bank. In simple words, an acquirer receives the purchase request from the merchant. This request is resent to the issuing bank by the acquirer for approval. Once the purchase is allowed, money is put in the merchant’s account. This process does not take too much time. This time differs among various financial institutions.

There are cases when the acquiring bank independently decides what to do with the payment. In these cases, the acquiring bank performs functions of both an acquiring and an issuing bank. This full-service offer implies that an acquirer is responsible for payment service and payment processing decisions. Moreover, sometimes an acquirer is able to provide payment services in cooperation with certain third-party providers. However, all details should be discussed and reviewed beforehand.

What about security

Acquiring banks are fully responsible for all approved transactions. Therefore, the merchant pays a certain amount of money to the acquirer for all its services provided. This amount constitutes a percentage of total sales. The services provided by the acquiring bank include various chargebacks, all transactions, and several refunds. There are also other important services that make transactions possible.

All parties that operate with the payment process should obey security standards that are set to prevent fraud. These standards are called PCI DSS. They are created to protect users’ data. Unfortunately, they are very difficult to understand with no technical knowledge. Thus, many merchants fail to understand it properly. These regulations are established by payment card brands. Some of these regulations indicate that merchants should use a safe Internet connection and updated antivirus programs. Furthermore, it is necessary to keep credit cards safe from unwanted third-parties.

The number of standards and regulations depends on total annual transactions. The violation of regulations often leads to severe problems. Firstly, these problems are financial, as merchants can be fined up to $100,000. Secondly, this issue can damage the reputation of an individual or a company. Therefore, all regulations should be followed. There are many payment providers that comply with PCI DSS. This can help merchants to avoid additional unnecessary concerns.

Lauren Author

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