Payments Blog

Issuing vs. Acquiring: What's the Difference?

Two players that are in the payments space are the issuing and acquiring banks. Both are underwriting parties in the payments landscape, and are in the transaction flow when information is being sent for authentication and authorization.

Issuer (or the cardholder’s bank): A commercial organization that underwrites the consumer. This line of credit is accessed through use of a credit or debit card, branded Visa, MasterCard, Discover, American Express and others. During any credit card transaction, the card issuing bank confirms the account holder is who he says he is, verifies that there are funds in the account to cover the purchase and authorizes the transaction. Examples: US Bank, Citibank, Bank of America, and others, plus many smaller local banks and credit unions.

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Acquirer (or the merchant’s bank): This is the financial institution that underwrites the merchant. The acquirer manages the merchant’s business account and provides the merchants with reconciliation tools. They are usually the first and primary contact for the merchant and sign merchants to card acceptance agreements. Some acquiring banks process transactions and some outsource the processing. Examples: Chase, Bank of America, First Data, Vantiv and Wells Fargo.

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Posted by Greg Esser

Greg Esser is currently fully responsible for Product and Sales Engineering for the Global Financial Institution Services Division, where he manages Technical Sales, market analysis and product enhancements across the issuing platform. With more than five years of industry experience, Greg has been a leader in many aspects of the Cardinal organization, spearheading inter-departmental and cross-functional groups tasked with evaluating and building solutions, direct merchant sales, global market services and the Management of Strategic Alliances. Greg’s sales mentality and product experience has played a key role in Cardinal's expansion in the global Card Not Present space. Greg has a B.S degree in Psychology from Heidelberg University.

Find me on: LinkedIn

Jun 21, 2016 8:30:00 AM

Topics: CardinalCommerce, chargebacks, issuing, acquiring

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