What Is A Credit Card Merchant Acquirer? Good Question. Lets Check In Detail.
At first, let’s understand what an acquiring bank is? An acquiring bank is a financial institution and these financial institution processes debit and credit card payments on behalf of merchants. The primary objective of this bank is to allow the merchants to accept various credit card payments within card networks. There are several credit card associations. Some of these are Visa, MasterCard, American Express, etc. These acquirer signs a contract with the merchants and offers a merchant account for their business.
Similarly, credit card merchant acquirer is a financial institution, and it is also known as a merchant bank. It is licensed as a member of card association. When any website starts accepting the payments, they need to do a few things such as signing a contract with an acquirer.
Role Of A Credit Card Merchant Acquirer In Payment Processing.
When a merchant processes their debit and credit card transactions on their website, they have to sign a contract with the acquiring banks. During processing transactions, the acquirer will authorise the credit and debit card transactions and connects to issuing bank on behalf of merchants.
When a cardholder processes a credit card in a purchase, the credit card merchant acquirer will either authorise the transaction or reject the transaction. The authorisation processed is based on the information from the issuing bank or card issuer. So, in conclusion, the acquirer will receive the authorisation request for the payment from the merchant side, and after that, the request will send it to the issuing bank to approve the authorisation. If the request is approved, the funds will be deposited to the merchant’s bank account.
Many credit card merchant acquirer also provides some full-service offer with an acquiring bank, issuing bank, and service provider at once. Remember that an acquirer can be associated with third-party providers to provide payment processing services.
Steps included in transaction authorisation.
- A cardholder will enter the personal data and chooses the payment option, i.e., debit or credit card.
- The website will encrypt the sensitive data and sends to the gateway.
- The data will be transmitted through the payment processor and various card associations to customer issuing bank.
- Once the transaction has been approved, it will reflect on the website.
After the whole process, the funds will be transferred to the merchant account.
Security Standards Of Credit Card Merchant Acquirer.
Credit card merchant acquirer will take all the risk and responsibility for processing transactions. That’s why they charge some fees for their services. The charges can be in the form of transaction fee, refunds, and chargebacks.
We know that the online transactions come under high risk of sensitive data violation category. So it is important for all the parties included in the credit card payment processor must follow the several security standards to prevent frauds. These standards can be found in the Payment card Industry Data Security Standard (PCIDSS).
The QuadraPay team is happy to see you on our website. Now you can accept debit and credit cards for the online business. For every business transaction online, the merchant needs a payment processing solution that simplifies their transactions. We accept credit card at a minimal transaction fee. To use our service, please fill up the form given on our home page. We will get back to you in 24-48 hours. Alternatively, you can leave a mail on [email protected]