How payment acquiring works
Accepting money from credit cards, i.e. acquiring payments made with credit or debit cards, is carried out by a “Processing centre” to a special bank “Merchant account”.
A Processing centre (Transaction Processing Clearinghouse) is a cluster of servers that ensure the entire procedure is carried out and belong to a “Payment processor” company licensed to conduct such activities.
A Merchant account is a special bank account of an organisation that is allowed to receive funds debited from other accounts without 100% customer identification, i.e. with only payment card information available.
Due to the inability to identify the customer, credit card transactions are associated with significant risk, therefore, incoming payments are paid for by account holders – “Merchants”. To minimise risks, “Merchants” are always advised to check such payments using various filters (Fraud filters) for fraud. Such services are provided by “Payment processors” and third-party organisations and are charged separately.
All payments processed by Processing centres are subject to mandatory authorisation by card schemes, such as VISA or MasterCard. “Regulators” strictly control the banks’ compliance with the established rules and, in case of violations, impose bans on payments between individual banks, and sometimes entire regions. Therefore, not all credit cards can be used to make payments to all regions. This information should be taken into account when choosing a bank to open a merchant account.
The bank that opened the merchant account is called the “Acquirer”. The bank from whose account the money is debited is called the “Issuer”. The bank must have a corresponding “Processing licence” to open a merchant account. The payment processing procedure – a chain of checks and settlements – is called “Clearing”.
Simplified scheme of acquiring is as follows:
Should you require assistance in opening a merchant account with an offshore or other foreign bank, please do not hesitate to contact our specialists.
