Acquiring bank
The bank that contracts with merchants to accept card payments, sponsors them with the card networks and pays them for their card sales.
What an acquiring bank is
An acquiring bank, or acquirer, is the financial institution on the merchant side of a card payment. It holds the merchant account, receives card sales through the network and pays the merchant. Because it is a card network member, it is responsible for the merchants, independent sales organizations (ISOs) and payment facilitators (PayFacs) it sponsors.
How it works
When a customer pays, the acquirer's processor sends the authorization request through the network to the issuing bank. At settlement, the acquirer receives the funds minus interchange and network fees, then pays the merchant, net of its own fees.
- 01 · BOARD The acquirer underwrites the merchant and opens its merchant account.
- 02 · AUTHORIZE Card payments go through the network to the issuer for approval.
- 03 · SETTLE The acquirer receives settlement and pays the merchant, net of fees.
| Role | Acquiring bank | Issuing bank |
|---|---|---|
| Customer | The merchant | The cardholder |
| Main job | Accepts and settles card sales | Approves purchases and bills or debits the cardholder |
| Earns | Merchant processing fees | Interchange on each purchase |
| In disputes | Represents the merchant | Represents the cardholder |
Card networks such as Visa and Mastercard connect the two sides and set the rules between them.
When businesses use it
- Merchants accepting cards in store, online or in apps
- ISOs and PayFacs that need a sponsoring bank
- Platforms that onboard their own merchants under a bank's sponsorship
- Marketplaces that collect card payments for many sellers
Cross River offers acquiring bank identification number (BIN) sponsorship for ISOs, PayFacs, marketplaces, merchants of record, software vendors and mobile wallets. Settlement runs through COS, Cross River's bank core, with merchant payouts over RTP, FedNow and push-to-card. See merchant services at Cross River.