Acquiring Bank

Definition

A financial institution licensed by card networks (Visa, Mastercard) to process payment card transactions on behalf of merchants, also known as a merchant acquirer. The acquiring bank maintains the merchant's account, underwrites the merchant's credit risk, settles funds from card transactions, and ensures compliance with card network rules and PCI DSS security standards. Acquiring banks earn revenue through merchant discount rates and are a fundamental component of the four-party card payment model.