With digital transactions dominating the market, it’s more important than ever for merchants to understand the mechanics of credit card processing. This process involves many interactions happening between several players behind the scenes. One of those players is the merchant acquirer, which plays a crucial role in facilitating these digital transactions.
Want to know more about the specific functions of a merchant acquirer? Read on to find out what merchant acquirers do and how to choose the right one for your business!
What Is a Merchant Acquirer?
A merchant acquirer (also known as an acquiring bank) is responsible for setting up and maintaining your merchant account, allowing you to accept payment cards. When a customer makes a purchase, the merchant acquirer acts as the intermediary between you and the card network, ensuring the funds from the issuing bank reach your account.
It’s worth noting the difference between merchant acquirers, card issuers, and payment processors. A card issuer is a bank or financial institution that issues credit cards to customers, a merchant acquirer is responsible for processing the transaction, and a payment processor ensures smooth data transmission between all parties.
The Role of Merchant Acquirers in Card Transactions
Let’s take a look at the lifecycle of a typical credit card transaction. First, the customer will provide their card information via a phone, terminal, or website. The payment processor will send this information to the card network (e.g. Visa). The card network will then reach out to the customer’s card issuer to review the transaction.
Once the card issuer verifies the payment, they’ll pay the required amount. The cardholder will pay them back later with any applicable interest. You’ll settle this transaction via your payment processor. At this point, the card network will release the funds to the merchant acquirer, which then deposits the funds into your account after deducting fees.
How to Choose the Right Merchant Acquirer
Choosing a merchant acquirer is a critical decision for any business that wants to accept credit card payments. First, assess your business needs, such as transaction volume and business model. Then, look for merchant acquirers that charge fees that make sense for you, i.e. if you often process large transactions, find an acquirer that charges a flat transaction fee.
Next, evaluate the service quality. Look at ratings and reviews from other merchants to gauge the acquirer’s performance and reliability. Ensure they offer solid customer support and value-added services, such as data analytics. Finally, consider their settlement periods, or how long they need to deposit the funds into your account.
Don’t let credit card processing questions slow down your business growth. For expert guidance on merchant acquiring services and to find the best processing solutions for your needs, schedule a consultation with MONA Payment Solutions today!