Payments glossary · Core
Acquiring Bank
An acquiring bank is a bank licensed by the card schemes to acquire card transactions. It holds the scheme membership, settles funds to merchants and is ultimately responsible to the schemes for the merchants and agents it sponsors.
How Acquiring Bank works
The terms acquirer and acquiring bank are often used interchangeably, but not every acquirer is a bank. In the EU and UK, authorised payment institutions and e-money institutions can also become card scheme members and acquire directly. Elsewhere, including the United States, non-bank processors and PSPs typically work under a sponsor bank that holds the scheme membership and the settlement relationship.
The acquiring bank carries the financial risk in the chain. If a merchant or payment facilitator cannot cover chargebacks, refunds or scheme fines, the acquirer must. That is why acquiring banks set underwriting standards, approve high-risk merchants, register third party agents such as ISOs and payment facilitators with the schemes, and may require reserves. Visa, for example, holds acquirers responsible for the acts of the payment facilitators and sponsored merchants they sign up.
For merchants using a PSP or payment facilitator, the acquiring bank is often invisible, but it matters: it determines which countries you can process in locally, how your transactions appear to issuers and how disputes are handled. It is worth knowing which bank or licensed acquirer sits behind your provider, especially in high-risk sectors where a sponsor's change of policy can end a programme.