Acquirer (Acquiring Bank): An acquirer, also known as an acquiring bank, is the financial institution or payment provider that enables merchants to accept card payments. The acquirer processes payment card transactions on the merchant’s behalf, settles funds into the merchant’s account, and assumes responsibility for the transaction until it is fully authorized and funded by the issuing bank.

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In essence, the acquirer acts as the merchant’s bank for card processing, facilitating the flow of funds between the merchant, the card networks, and the customer’s issuing bank. This role is central to the payments ecosystem and also carries financial and compliance risk.

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Key Responsibilities of an Acquirer:

• Merchant underwriting: Evaluating the merchant’s business model, risk level, and compliance with card network rules before approving them
  
• Transaction processing: Routing payment authorizations, capturing funds, and ensuring settlement
  
• Ongoing risk monitoring: Detecting fraud, monitoring chargebacks, and reviewing merchant behavior over time
  
• Regulatory compliance: Ensuring merchants adhere to card network standards and applicable financial regulations
  
• Liability management: Covering chargebacks, fraud losses, and potential fines if a merchant fails to meet obligations

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If a merchant commits fraud, processes prohibited content, or becomes insolvent, the acquirer is typically liable for related chargebacks or penalties. For this reason, acquirers play a gatekeeping role in the ecosystem and are expected to apply strong controls across onboarding, transaction monitoring, and content compliance.

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When a merchant opens a merchant account, it is usually provisioned by or through an acquirer. In some models, acquirers may work directly with merchants or through intermediaries such as PayFacs or ISOs, but the acquirer remains the regulated entity responsible to the card networks.

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In summary, an acquirer is the institution that gives merchants access to card acceptance, processes their payments, and assumes risk and accountability for the transactions flowing through their portfolio.

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