One of the things you need when operating an online business is the process of how you will be accepting payments. When setting up the different payment processors, you must sign a contract with an acquirer who plays an essential role in payment processing. But who is an acquirer, and do you need one?
Who is an acquirer, and what is their role in processing payments?
An acquirer is a financial institution or bank that processes debit and credit card payments for businesses. Acquirers allow merchants to accept and process credit cards and debit cards from card-issuing banks within a card network or association, for example, MasterCard and visa.
An acquirer is responsible for receiving card details from the merchant’s terminal and passing the transaction information through to the card issuer via the card network for authorization and processing the transaction.
Once a purchase takes place, the merchant’s terminal forwards the information to the acquirer. The acquirer then authorizes and completes the sale by running the information through the card network to the card issuer.
The acquirer then arranges the cards payment settlement and credits the merchant’s nominated bank account with the money according to their service agreement.
The acquirer acts as the payment facilitator by processing credit card transactions and crediting the merchant’s bank with the correct funds. The acquirer deals with any payment disputes of chargebacks or requests for information that may be requested from card issuers on any of the merchant transactions.
So, if you want to start accepting credit card or debit card payments on your website, you will first need a merchant account. You can get one by signing a contract with an acquiring bank. As we have seen, the acquiring bank will process the credit card transactions and deposit the money to your merchant account.
Some major acquiring banks may also act as payment service providers and deliver payment processing solutions. Some banks provide a complete service offer and work as the issuing bank, acquiring bank, and payment service provider all in one. However, an acquirer may also partner with other providers to provide payment processing services.
How to choose the perfect acquirer
The acquirer you select will depend on many factors. You won’t find a “one size fits all”; you just need to find an acquirer that supports your business needs.
Before settling on an acquirer, here are some things you need to consider
Whether they support the payment cards you accept on your site
The type of payment cards you are willing to accept on your website is essential because some acquirers don’t accept all credit or debit cards.
Remember to ask for other payment methods if you need them.
Does the acquirer work with the same payment gateway as your business?
If the acquirer you choose works with your payment gateway, it’s a good thing, but if they don’t work with your chosen payment gateway, you can look for another payment gateway, but that would be a hustle. It’s better to go with an acquirer that uses the payment gateway you also use.
What locations and currencies does the acquirer support?
Ensure to check the acquirer that you are considering offers their services in the country in which your business is registered. Also, check whether the acquirer supports the countries you do business with.
Another important consideration is to consider the currencies your customers will be paying. Will it be euros or dollars, or do you want to include other currencies? No matter the list of currencies you are using, ensure the acquirer you are interested in working with supports your preferred currencies.
Check how much they charge for their services.
Check how much the acquirer charges. Some of the fees they may ask for are transaction fees, monthly fees, signup and set up fees, refund fees, currency conversion fees, features fees, chargeback fees, business model fees, settlement fees.
Fees are charged to cover the costs associated with payment processing and merchant-related services. If the acquirer is upfront about the prices they charge, it will help you determine whether your business can afford their services.
Check their security features.
Acquiring banks usually assume the responsibility and the risks for the processed transactions. That’s why they charge different fees for the additional services they offer, such as chargebacks or refunds.
Online transactions are usually vulnerable to fraud, and all parties involved in the payment processing must follow PCI guidelines for fraud protection. So, ensure the acquirer you choose is PCI compliant and financially regulated.
Ensure you go with an acquirer that offers fraud prevention tools and solutions to save your business from fraudsters and cyber-attacks.
How long do they take to send funds to your bank account?
Funding cycles and settlement periods are the number of days it takes for the acquirer to send funds to your account after the transactions made by your customers.
After each settlement period, the acquirer sends money into your account. This is important to know in your business to choose a period that suits you, whether daily, weekly, or monthly.
Check whether they support recurring transactions.
If your business model is based on recurring payments or subscriptions, ensure the acquirer supports this payment model through a well-developed API.
Check for their reviews.
Sometimes it helps to ask around or check for reviews online of other businesses that may have worked with the acquirer you are considering.
Check what they say about their services and all. It will place you in a better position to make a good decision on whether to work with them or not.
What will the acquirer ask for?
Before the acquirer grants you a merchant account, they will ask for;
- Your company name
- Your business model – this determines your fees whether you are a high-risk business or not.
- Your website details – they need to check your payment gateway to see if it is the same.
- Average transaction amount and monthly turnover
- History of transactions if you have previously worked with another acquirer
- Bank account details are essential to check the currencies you work with and how many bank accounts are associated with your business.