What Exactly Is Card Acquiring?

One type of business that seems to make money hand over fist would be none other than banks. It just makes sense that at the end of the day, those who hold all of the money on behalf of others are extremely well-poised to take advantage of the fact that money makes money.


But then, banks wouldn't be of much use if there wasn't a straightforward system in place for cash to be transferred between two parties who make a transaction. Once, this was entirely facilitated through the depositing and withdrawal of cash, but now, thanks to credit and debit cards, there's a whole other sort of payment processing required. Now, physical cash never has to leave a building for it to be transferred from the account of someone at one bank to the account of someone at a completely separate institution. This is all facilitated through electronic payment systems. The bank the money comes from is the issuer, while the bank the money goes to is referred to as the acquirer.


Part of this process involves something referred to as card acquiring. Here's the exact explanation of what the process is:


The Issue


Despite the confusing usage of terms, card acquiring is actually done by a payment processor more often than it is by an actual acquirer. The issue a payment processor is solving is that although there are two different banks that each may have their own cards electronically hooked up to their own systems, there's a whole other set of infrastructure required for quick and easy transfers between banks. This is why it's essential to read and acquire the information on the card, then transmit that information everywhere it needs to go for the funds to be released.


How Card Acquiring Works


The process begins with the input of the card information, either manually or via swipe or insertion. This is when a card acquiring service such as Interac, Visa, Mastercard, or similar processor steps in. First, the machine with the card's information prepares itself with the acquiring bank to let it know that a deposit is to be made. Then, the payment processor speaks with the issuing bank to communicate the fact that a transaction has been made with their client's consent for money to be sent to the merchant's account with their bank, the acquirer.


Is There a Catch to Card Acquiring?


Not necessarily. Card acquiring is a straightforward service and the only "catch" to speak of is that payment processors typically charge a fee for their services. After all, they are the gatekeepers for giving and receiving money, so they like their cut of the pie as well. Usually, this is something in the realm of 2.5% of the transaction, so being in the payment processing business can be quite lucrative at the end of the day.




No transaction would be able to proceed without card acquiring - all of our debit and credit cards would be reduced to useless hunks of plastic that would only be useful for using an ATM connected to our specific banking institution. While the payment processors make their cut, merchants and customers still find them absolutely indispensable.

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