What is acquiring

Whitepay Posted 03.11.2022 • 3 mins read
What is acquiring

It's hard to imagine that once people were not able to pay with credit or debit cards. Nowadays it’s a common thing, but do you know how it works? If you want to accept payments by card in online stores or in offline points, it’s necessary to have an acquiring agreement. An acquiring agreement is signed with an acquirer that has the right to acquire VISA and Mastercard. Such an agreement assures that transactions between a card payment and a bank account work.

What is acquiring?

If you do not know the exact meaning of the word "acquiring," you encounter this concept every day. Today, most of us pay in stores, cafes and other places by card. We also receive our salaries by card. When making an online purchase, you also enter your card data to pay for the purchase. This is acquiring. 

In the payment industry, this term means the ability to make payments using cards. Bank-acquirer provides accepting and processing of transactions, it is considered a licensed participant of the payment system. In order to obtain this status and license, it is necessary to fulfill a number of conditions set forth by the payment system. Thus, not all banks can be acquirers.

Bank-acquirer provides reception and processing of transactions, it is considered a licensed participant of the payment system. In order to obtain this status and license, it is necessary to fulfill a number of conditions set forth by the payment system. Thus, not all banks can be acquirers.

The key task of the acquiring bank is to confirm the payment. The bank must process the data received from the issuing bank and the payment system. Then it already decides whether to confirm the plea or not. In addition, the bank is responsible for the risks associated with the online transaction. Therefore, banks provide their solutions to merchants, both without intermediaries and through payment providers. These are companies that help sellers provide a secure payment acceptance infrastructure that minimizes risks for the acquirer.

Simply put, acquiring is what makes card payments possible in traditional stores and online. Therefore, it is important to understand what it is, how it works, what types of acquiring exist, what are its advantages and disadvantages.

How does acquiring work?

When the buyer pays for the purchase and applies the card to the POS terminal or places an order online, he initiates the transaction and consents to the debiting of funds. So, let's take a closer look.

  1. The buyer initiates the transaction, and the debit request enters the payment gateway.

  2. The intermediary company scans the payment to prevent fraudulent transactions.

  3. The request goes to the payment system, which confirms the payment.

  4. If the payment system has a separate issuing bank, the request is forwarded to it.

  5. The bank checks whether there are enough funds in the account, as well as whether the card has not been stolen or lost.

  6. If everything is in order on the part of the issuing bank, it sends a confirmation code to the acquiring bank.

  7. On the basis of the received information, the acquiring bank confirms or rejects the payment.

  8. If the payment is confirmed, the bank withholds the required amount and then transfers it to the seller's account.

  9. In case of failure, the payment provider displays an error on the checkout page or on the POS terminal screen.

  10. If the merchant does not have an account with the acquiring bank, the money goes to the account of the payment provider, and the seller can withdraw it at any time.

Types of acquiring 

In general, acquiring can be divided into several types. Internet acquiring, merchant acquiring, mobile acquiring, and we want to highlight crypto acquiring separately.

Internet acquiring allows online stores to accept payments by bank cards. Merchants must sign an agreement with an acquiring bank or a payment provider to accept online payments. Most prefer the second option, as banks impose serious requirements on merchants.

Merchant acquiring allows you to accept non-cash payments in a traditional store. For example, it can be a supermarket, convenience store, cafe, restaurant or clothing store. For this type of acquiring, merchants must have access to a POS terminal. Merchants must also contact a bank that offers merchant acquiring services and conclude an agreement. The bank takes care of all technical settings, and merchants pay a monthly subscription fee. 

Mobile acquiring is an opportunity to accept cashless payments anywhere, you just need to have an mPOS terminal. This is a small card reader device that is attached to a smartphone or tablet. It is also equipped with special software to read cards and send a request to the bank. The main advantage is mobility, because such a device does not require connection to the mains, so it can be carried with you. 

As for cryptocurrency equaring, this method involves online or offline payment for services or goods in cryptocurrency. There are many cryptocurrency payments, which we have already described in the previous article. That is why Whitepay has created opportunities for accepting cryptocurrency for payment. 

Whitepay's goal is to make cryptocurrency payments and exchanges affordable, fast and easy. We have created a special platform and terminal (POS) to bring such payments even closer. 

Online stores, traditional shops, exchange offices, foundations and organizations - all of them will be able to set up fast and secure payment acceptance. Our support team is ready to answer all your questions and help you set up the processes.

How to become a Whitepay partner:

  1. Fill out the partnership application on our website.

  2. As soon as we receive your application, we will contact you, answer all your questions and find the best solution.

  3. And that's all! You can accept cryptocurrency right now. 

If you have any questions, please send us an email.