Acquiring Bank
An acquiring bank (or Merchant Acquirer) is the financial institution within a card payment process that processes payments on behalf of merchants, enabling them to accept credit and debit card transactions and ultimately acquire the funds from the transaction. Acquirers facilitate payment authorisation, clearing, and settlement between businesses and card networks, connecting merchants to card networks like Visa and Mastercard. Acquirers facilitate transactions and may charge processing fees, but as a rule, interchange fees are set by schemes. With the rise of alternative payment solutions, acquiring bank services face increasing competition from Open Banking alternatives to card payments.
Applications
E-commerce:
Reduces fraud in online card payments by verifying the cardholder's identity
E-commerce:
Reduces fraud in online card payments by verifying the cardholder's identity
Advantages
- Enhanced security: Reduces unauthorised transactions by verifying that the genuine account holder is authorising the payment
- Enhanced security: Reduces unauthorised transactions by verifying that the genuine account holder is authorising the payment
Challenges
- User Experience: Additional authentication steps can cause friction and increase checkout abandonment
- User Experience: Additional authentication steps can cause friction and increase checkout abandonment
