My Merchant Account Blog

Acquirer

Monday, January 31, 2011

The financial institution that establishes and maintains the merchant account, receives transactions from the merchant, and initiates the interchange via VISA / MasterCard. The acquirer must be a licensed member of MasterCard or VISA.

A federally insured financial institution responsible for connecting merchants to Visa Inc. and MasterCard Worldwide authorization and settlement systems. This can also be known as:

An acquiring bank
Merchant bank
Sponsor bank

Acquirers and merchants are the two signatories to merchant agreements. Acquirers can be thrifts, banks or credit unions. For example, First National Bank of Omaha is an acquirer and a bank. To sell bankcard services, it is necessary to have a signed agreement with an acquirer or be part of an ISO that is sponsored by an acquirer. &nbsb;Among other things, an acquirer deposits daily card totals to merchant accounts and debits monthly processing fees from those accounts. The acquiring bank must handle all funds, deposits and settlements with merchants.

ISOs and other entities on the acquiring side of the bankcard business also refer to themselves informally as acquirers, as evidenced by several regional acquirers associations thriving throughout the United States, but strictly speaking, they are not acquirers.