Characteristics Of A Merchant Acquirer And Their Role In Payment Processing

What exactly is a Merchant Acquirer?

A merchant acquirer refers to a financial institution that handles transactions in lieu of a firm or a merchant.

The merchant is the vendor in terms of payment. In other words, a merchant is a company or individual who sells products or services to paying clients.

Rather than the merchant, the ‘acquirer’ aims to specify the merchant’s bank account. The financial institution or bank that handles funds submitted by customers to a company is considered a merchant acquirer. They’re also referred to as an acquiring bank. They’re called the acquirer since they accept money on behalf of the merchant when a user pays.

Payments processors explained

A payments processor is, as the term implies, a company that handles payments. They are technological businesses that may authorize and execute payments in lieu of the issuing/acquiring bank.

However, matters can become a little more complicated here because there are two sorts of payment processors:

  • Global Processing Services, for example, interfaces with card schemes and issuing banks to coordinate card issuance, authorize transactions, offer a system of record, and engage with all the various settlement partners.
  • The acquiring bank hires an acquiring processor to allow their merchants to process transactions for them via a variety of methods, including credit and debit cards.

Both types of payment processors are required to adhere to card associations’ norms and laws, as well as perform a variety of tasks, such as installing fraud prevention systems that assess transaction validity.

What is the role of a merchant acquirer?

Merchant acquirers are companies that accumulate payments made by credit cards after they have been approved by retailers. They’re an element of the payment system that ensures consumers can purchase safely and merchants get paid. The merchant acquirer works with the aforementioned during the payment cycle:

  • Confirming the cardholder and card’s authenticity
  • Providing data security for cardholders
  • Approving payment from the bank that issued the card
  • Getting the money to the merchant
  • Clearing all transaction fees paid by credit/debit card providers in place of the bank.
  • Returns, chargebacks and refunds are made easier.
  • Supplying merchants with payment terminals
  • Enabling merchants’ online payment gateways.

Merchant and customer protection 

Working with confidential financial data has a high level of danger and as a result of this, merchant acquirers have safeguards in place to protect merchants from fraudulent activities and chargebacks.

Several credit/debit card regulations hold merchants accountable in the event of a chargeback. This occurs when a payment intended for the merchant’s bank account is instead returned to the consumer’s bank account.

In order to safeguard the merchant against fees and chargebacks, the merchant acquirer will analyze and check transaction information and cardholder claims. If your contactless payment is denied and you’re encouraged to use chip and pin instead, you may have encountered this as a consumer. In this situation, the transaction may have been refused by either your bank or the acquiring bank for security concerns and to avoid chargebacks.

While merchant acquirers are theoretically responsible for facilitating transactions for merchants, they also have rigorous policies in order to avoid illegal financial behaviour. This implies they’ll monitor the merchant on a periodic basis to ensure he or she isn’t participating in fraudulent behaviour such as money laundering. Clients and other firms will be protected as a result of this.

Is it necessary for me to approach a merchant acquirer in order to take payments?

Each card payment you receive for your organization will necessitate the use of a merchant acquirer. You will have to have a merchant acquirer if you want to handle payments personally as well as incur a charge with every payment when using their services, along with the ability to use the software they provide.

We recognize that firms require independence and ease to develop and assist their consumers as a pioneer in hospitality and retail technologies.


Radar Payments offers a full range of acquiring services, including merchant management, ATM management, driving and monitoring, and complete card management (regardless of the payment method underlying the transaction), including personalization, loyalty, and wallet schemes.

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