An acquirer is a financial institution that acts as an intermediary between merchants and card payment networks such as Visa and Mastercard. Sometimes merchants work directly with acquirers, and they can work through other companies such as merchant service providers.
Examples of acquirers
In the UK, merchant acquirers include
- Barclaycard business
- First Data
- Global Payments
- Lloyds Bank Cardnet
Technically, the term “merchant acquirer” refers specifically to financial institutions that acquire (supervise) merchants that accept card payments.
Acquirers ensure that merchants operate within the law and the contractual terms of the payment card network.
In practice, the term “acquirer” is often used to describe other companies working in the area of payment card acceptance. This is understandable since many companies can fulfil more than one role.
For example, many acquiring banks also offer payment processing services. This means that they can handle the technical side of card transactions.
Similarly, merchant service providers are usually processors rather than acquirers. They do, however, often fulfil an acquirer’s responsibilities.
Why you need a merchant acquirer
You need an acquirer to be able to take card payments. Most acquirers will support debit cards and credit cards from both Visa and Mastercard. Some acquirers will also support more niche card networks such as American Express, Diners Club, Discover and China UnionPay.
How to choose a merchant acquirer
Here is a quick guide to the four main points you should check when looking to open a merchant account with an acquiring bank.
Do they offer what you need?
Before you start to look for a merchant acquirer, make a list of what you need that acquirer to deliver. For example, think about:
- which cards you want to accept
- whether you want to offer e-commerce or just take payments in-store
- whether you want to take cross-border payments
- whether you want to take recurring payments
- whether you need your acquirer to support other partners (such as merchant service providers) or technology (such as online checkout software)
Do you look like a good fit for them?
If you identify that a merchant acquirer looks like a good fit for you, it’s advisable to think about whether or not you look like a good fit for them.
In particular, be aware that some acquiring banks may decline to take on merchants they consider to be high-risk.
An acquiring bank’s website will give you guidance on this. If that’s not enough, it can be useful to contact them for an opinion before making a formal application.
Do they have a good reputation for customer service?
Firstly, check what support they offer as standard. In particular, see if they have a phone number and, if so, what hours it operates.
Secondly, check what companies similar to yours have to say about their customer service.
Be very wary of signing a contract with an acquirer that has a poor reputation for customer service – even if they offer low fees.
Do their fees offer you good value for money?
The key to working out if a prospective acquirer’s fee structure offers good value for money is to have a clear idea of how you expect your card acceptance to work.
Specifically, you want a decent estimate of the volume and value of the transactions you expect to take. It’s also useful to have an idea of the specific type(s) of cards you expect cardholders to use.
As a rule of thumb, if you expect to take a significant number of transactions, it generally makes sense to look at committed tariffs. These usually offer the lowest costs.
If, however, you only expect to take a small number of transactions, then pay-as-you-go is generally the better option.