Acquirer

The card payment system has two sides. The issuer is the bank that gives the card to the customer. The acquirer, also called the acquiring bank or merchant acquirer, works with the merchant.

The acquirer signs up merchants, provides or arranges card terminals and online payment services, submits transactions to the card networks for authorisation and settlement, and credits merchants with the money from card sales, minus fees. It also bears some risk, for example if a merchant goes out of business and owes refunds to customers.

For example, a clothing shop opens a merchant account with an acquiring bank. Each time a customer pays by card, the acquirer processes the payment and later pays the shop, deducting fees that include the interchange fee paid to the card issuer.

Many modern payment companies act as acquirers or partner with them to offer simple card acceptance to small businesses. The word acquirer also has a different meaning in mergers and acquisitions, where it refers to a company that buys another company.