An acquiring bank is the bank or financial institution that holds a merchant account and processes card payments on behalf of a business, settling the funds from card transactions into that account. It is distinct from the issuing bank, which provides the customer's card.
General information, not financial, legal, or tax advice. Verify current terms and eligibility with the provider before applying.
How an acquiring bank works
An acquiring bank is a financial institution, licensed by card schemes such as Visa and Mastercard, that enables a business to accept card payments by providing and holding a merchant account. When a customer pays by card, the acquiring bank receives the transaction from the business and routes it through the card scheme to the cardholder's issuing bank, which approves or declines it. For approved payments the issuing bank releases the funds through the scheme to the acquiring bank, which then settles the money into the merchant account, less the relevant fees. The acquirer also carries responsibility for risks such as chargebacks. This information is current as of 19 June 2026.
Acquiring bank and issuing bank
The acquiring bank works for the business that accepts the payment, while the issuing bank works for the customer and provides the card used to pay. In a card payment the two sit on opposite sides: the issuing bank checks the cardholder has funds or credit and approves the payment, and the acquiring bank receives and settles it for the business. The card scheme connects the two and sets the rules they follow.
Why it matters to a business
A business that wants to take card payments needs a relationship with an acquiring bank, directly or through a payment provider that works with one, because the acquirer is what makes settlement to the business possible. The acquirer relationship affects which cards can be accepted, how quickly funds settle, and the fees deducted, which often include an interchange fee and a scheme fee passed on within the overall cost. Confirm the supported cards, settlement times, and charges with the provider, as these vary.
Frequently asked questions
What is an acquiring bank?
What is the difference between an acquiring bank and an issuing bank?
Is an acquiring bank the same as a payment processor?
Why does a business need an acquiring bank?
Definitions, fees, features, and eligibility change and vary by region. This page was last reviewed on 19 June 2026. Confirm current terms with the provider before applying.