Who is acquirer

Issuers take on the inherent risks of issuing credit to customers. Issuing banks must accept, restrict, or deny card applications based on the credit-worthiness of the applicant. The issuing bank essentially provides unsecured, short-term loans to cardholders. In return, they collect monthly interest fees as long as the debt remains unpaid. If the customer completely defaults, however, the bank could be liable for all unpaid debts. So, that gives a rough overview of the issuer's role in the transaction process.

What about the other half of the "issuer vs acquirer" question, though? Acquiring banks provide merchant accounts to businesses and are authorized to process credit or debit card payments on your behalf.

They ensure your transactions are routed to the card network appropriately. In some instances, acquirers process transactions themselves.

More typically, they will work in tandem with third-party payment processors. They then serve as a middleman between you, the processor, and the card network. Like issuers, acquirers assume some of the financial risk associated with payments.

If a data breach occurs somewhere in the transaction flow, for example, the acquiring bank could be liable for the compromised transaction. Also, they could be liable for any outstanding refund or chargebacks if a business fails.

Thus, acquirers must focus on the bankruptcy potential of the merchants they represent. Any business applying for a merchant account is carefully vetted.

Potential gains are weighed against possible future losses. If the risk factor is deemed unacceptable, the account will not be granted. One way to remember the roles of an issuing bank vs acquiring bank is to think of the former as the ones who issue payment cards. In contrast, the latter accepts or acquires payments for you. The explanation is not perfect, but it should help. There are substantial differences between an issuer vs acquirer. However, both roles are essential.

Acquirers allow you to accept payments through their relationships with the card networks. Issuers enable customers to make payments in much the same way. Acquirers authorize and process transactions but rely on issuers to validate credit cards and issue payments. In short, they have a symbiotic relationship.

Both pieces must be in place for the system to work. Networks are the final authority regarding funds being routed from cardholders to merchants.

They are not banks, just a service provider and administrator. Meanwhile, other card brands like American Express and Discover serve as both the credit card network and the issuing bank for their cardholders. They can approve applications and keep track of account balances. They can authorize or deny funds for a given transaction, and render judgments in customer dispute claims.

Simply put, transactions cannot be processed without an acquirer, but they can be processed without a separate issuing bank if the card brand is functioning in that capacity. Of course, this only contributes to the confusion between the roles of the two bank types. The Chargeback Field Report is now available. Based on a survey of over US and UK merchants, the report presents a comprehensive, cross-vertical look at the current state of chargebacks and chargeback management.

Acquirers and issuers each influence the chargeback process in different ways. Create a personalised content profile. Measure ad performance. Select basic ads. Create a personalised ads profile. Select personalised ads. Apply market research to generate audience insights. Measure content performance. Develop and improve products. List of Partners vendors. An acquirer is a company that obtains the rights to another company or business relationship through a deal.

These deals are usually mergers or acquisitions , but can also be other structured agreements. Acquirers buy out a company and take over their ownership typically through a purchase of a large portion of the target company's stock.

There are plenty of reasons as to why a company would be interested in acquiring another company. These reasons can include a reduction in competition, the creation of synergies , and access to a new market. Acquirer relationships can vary by the type of deal in place. Corporations can acquire another company through a deal process that allows them to pay an agreed-upon price for the rights to take ownership of another company and integrate it with their current business operations.

This can take the form of a cash purchase, purchase of stock, exchange of stock, or a combination of all. An acquisition is usually agreed upon by both companies but sometimes can be one-sided. In this instance, an acquisition is a hostile takeover and the target company usually implements procedures to avoid being acquired, such as the use of a poison pill.

In the payments industry, an acquirer may also be a financial institution that partners with a merchant to complete electronic payment transactions and deposit processes. For example, a retail store that sells clothing would like to set up an electronic payment system that allows its customer to pay electronically by credit card or their phone. The retailer would enlist the services of a merchant acquirer, also known as a merchant bank, that would take control of the merchant's account and accept deposits into the account from customer payments.

In a corporate acquisition, the acquirer is the company purchasing another company for a specified price. Corporate acquisitions are usually agreed upon by two parties. They allow an acquiring company to fully take over a business and integrate it into their current business. What is an acquirer? A merchant acquirer or acquiring bank known as an acquirer is a bank or financial institution that processes credit and debit card payments for businesses. Acquirers enable merchants to accept and process credit and debit card payments from card-issuing banks within a card association or card scheme card network for example Visa and Mastercard.

The acquirer then authorises and completes the transaction by running the information through the card scheme, to the card issuer. What is an issuer? Issuer processing companies act as payment facilitators between the consumer and the card scheme by committing to the payment of the transactions on behalf of the cardholders. What is a payments processor? A payments processor is — as its name suggests — an entity that processes payments.