What Is an Acquiring Bank?

An acquiring bank, also known as a merchant bank, is a financial institution that processes credit and debit card payments on behalf of merchants.

 It provides merchants with tools for processing card payments, such as: 

• point-of-sale (POS) systems
• payment gateways
• merchant accounts. 

The acquiring bank:

• is responsible for routing transaction data between the Saas businesses’ POS system and the card networks (like Visa or Mastercard).
• ensures that funds are transferred from the issuing bank (the cardholder’s bank) to the merchant’s account, minus any fees

An acquiring bank acts as the primary link between the merchant, the card networks (such as Visa or MasterCard), and the issuing bank.

Core functions:

• Merchant Onboarding: Set up merchant accounts.
• Transaction Processing: Handling real-time payment flows
• Settlement: Transferring approved funds to the merchant’s account.
• Zarządzanie ryzykiem: Managing fraud, chargebacks, and regulatory compliance
• Technology support: Including POS systems and payment gateways.

Acquiring banks assume risk, making them key to the security and reliability of card-based payment ecosystems.

The difference lies in who they serve oraz what roles they play in a transaction.

An acquiring bank ensures funds reach the merchant, while the issuing bank ensures the cardholder has sufficient funds or credit.

In online transactions, the acquiring bank is part of a multi-step process that ensures secure payment authorization and fund settlement.

Steps: 

1.  The process begins with the payment authorization, in which the client makes a purchase on a merchant’s website and securely transmits their payment information to the acquiring bank via a payment gateway.
2. The acquiring bank submits the transaction data to the card network (e.g., Visa, MasterCard) for approval by the issuing bank.
3. Once accepted, the acquiring bank credits the merchant’s account and settles the funds, minus any costs, after clearing the transaction.

Though they work closely together, SaaS payment processors and acquiring banks have different responsibilities.

the processor enables the transaction, but the acquirer completes and settles it.

Acquiring banks manage risk using a multi-layered strategy focused on prevention, monitoring, and continuous improvement.

Fraud and Risk Management Strategies:

• Merchant underwriting: Assessing merchant credibility before account approval

• Transaction monitoring: Detecting suspicious patterns in real time

• Sztuczna inteligencja i uczenie maszynowe: Identifying fraudulent behavior with predictive analytics

• Chargeback management: Handling disputes and issuing refunds where necessary

• PCI DSS enforcement: Ensuring merchants meet security compliance standards

Because acquiring banks are liable for fraud losses, they invest heavily in fraud detection technologies and strict merchant screening.