An acquirer, also known as an acquiring bank, is a financial institution that acts as an intermediary between merchants and card payment networks such as Visa and Mastercard. The acquirer allows merchants to accept credit or debit card payments from the card-issuing banks within a card association. The acquirer enters into a contract with a merchant and offers it a merchant account, which provides the merchant with a line of credit. Under the agreement, the acquiring bank exchanges funds with issuing banks on behalf of the merchant and pays the merchant for its daily payment-card activitys net balance. The acquirer is responsible for implementing security standards and ensuring that merchants operate within the law and the contractual terms of the payment card network.

Acquirers can be banks or financial institutions that are licensed to provide merchant accounts to qualified businesses, enabling these businesses to process payment card transactions. They can also be companies that obtain the rights to another company or business relationship through a deal, such as mergers or acquisitions.

The main duties of an acquirer include issuing merchant accounts, obtaining funds from the cardholder’s issuing bank and depositing them into the merchant’s account, assessing fees to the merchant on behalf of the processor, issuers, and card brands, and monitoring risk and implementing revenue holds when necessary.

In summary, an acquirer is a financial institution that processes and settles payments made by shoppers on behalf of its merchants, allowing merchants to accept credit or debit card payments from the card-issuing banks within a card association.