Articles

How to Avoid Chargebacks

Chargebacks can cause a great deal of trouble for a business, especially when merchant accounts initiate fees for them. Credit card processing has a wealth of benefits, but it also has complications such as consumer chargebacks. Consumers initiate chargebacks for a wide variety of reasons including fraud, attempted theft, honest mistakes and discontent. Every business […]

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Building Your Small Business

Accepting credit cards is a necessity for small businesses because it allows them to remain competitive, offer convenient payment methods to buyers and not forego a sale in the event customers come up short of cash. Understanding the world of credit card processing can seem daunting at first, but these 3 key principles help address […]

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Reading Reviews Before Selecting Your Merchant Account Provider

When looking to select a company to use as a credit card processor, it’s wise to choose one that offers all the right services at a good price. However, one should take it further, and here are three things to look at when reading reviews for a merchant services provider. Speed: Without a doubt, if […]

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All About Flagship Merchant Services

Flagship Merchant Services has been helping merchants conduct transactions online for many years. As a leader in credit card processing and merchant accounts services, Flagship Merchant Services has remained focused on giving business owners of all size the solutions they need to effectively do business completely online. How does credit card processing work? There are […]

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All About CreditCardProcessing.com

Without a doubt, when looking to get credit cards processed, one should go with a solid, reliable and trustworthy company. When doing so, it’s easy to avoid mistakes that others suffer from. While true, one should know where to look, and CreditCardProcessing.com is a great place to go, and here are three reasons why. Provide […]

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What is the Bankruptcy Notification Service?

Without a service, it’s hard for people to know when someone went bankrupt, and this is often a problem when dealing with merchant accounts or other financial services. For this reason, the two major worldwide credit card companies, Visa and MasterCard, have developed a service to help people track bankruptcies. With this, people can see […]

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Acquiring banks, also known as merchant banks, are financial institutions or banks that are members of a card association licensed with credit card companies. Some well known card companies are MasterCard, Visa, American Express and Diners Club.

What does an an acquiring bank do?

Acquiring banks accept credit card processing with a use of debit and credit cards issued by all banks within the associated card. The acquiring bank signs a contract with a merchant and offers it a merchant account.

The acquiring bank is linked to a merchant with a line of credit, and not with a bank account. This is known as a merchant account. Acquiring banks serve as a link between the merchant, card association and the issuing (cardholder) bank.

How are merchant accounts set up?

Merchant accounts are established directly with an acquiring bank or through a payment gateway (PSP). The acquiring bank:

accepts the risk of the merchant’s business
provides merchant account to allow payments
manages all transactions related to account

A merchant account is responsible for credit card processing, clearing of funds, and depositing the funds into a merchant’s bank account. Acquiring banks charge for services, and these fees vary and are dependent on:

the country or merchant’s business
set up
chargeback fee
monthly fee
commission
fixed fee per transaction
SWIFT fee

Not all acquiring banks charge for fixed fee per transactions and SWIFT fees, and fee vary depending on the type of business and the country the business is located.

Risk involved:

Acquiring banks take great risk. Because of the, the acquirer takes a great interest in the nature of the merchant’s business and practices. Banks keep a close eye on the merchant, and make sure the merchant account is maintaining positive transactions and avoiding chargebacks.

Clear record:

Having a clear record is vital due to the risk of not receiving payment for frauds and illegal transactions coming from scams and/or identity theft is frequently encountered when doing business online.