Content
- What is acquiring?
- Participants in acquiring
- How does acquiring work?
- How is acquiring beneficial for businesses?
What is acquiring?
Acquiring is an advanced technology that allows sellers to accept cashless payments using bank cards or contactless payment systems. This capability significantly simplifies and speeds up the payment process at any point of sale, creating convenience for both the seller and the buyer.
Participants in acquiring
The acquiring system involves several key parties, each playing its unique role:
- Seller: This can be either an organization or an individual entrepreneur engaged in selling goods or services.
- Acquirer: A bank or service that provides the necessary equipment for payment acceptance and services the seller's settlement account. The acquirer charges a fee for its services.
- Client: An individual making a purchase and using cashless payment.
- Issuing bank: The bank that issued and services the client's card.
How does acquiring work?
To connect to acquiring, the seller must enter into a contract with the acquirer bank. The bank creates all necessary conditions: opens a settlement account, sets up the equipment, and trains the staff. The acquiring process occurs in several steps:
- The payment information from the client's card or device is transmitted through the terminal or application to the processing center of the acquirer bank.
- The acquirer sends the data to the issuing bank for verification.
- The issuing bank checks the availability of funds in the client's account and confirms or declines the transaction.
- If the result is positive, the approval information is sent to the acquirer bank and then to the seller's terminal.
- The issuing bank confirms the successful completion of the payment, and the funds are deducted from the client's account and transferred to the acquirer.
- Finally, the acquirer transfers the funds to the seller's settlement account.
Typically, the payment process takes only a few seconds. However, processing time may increase in case of poor internet connection or technical issues. The money arrives in the seller's account within a few days, and the purchase amount is reserved on the client's card during payment.
How is acquiring beneficial for businesses?
The absence of acquiring can lead to the loss of clients and profits. Cashless payment provides businesses with numerous advantages:
- Increased revenue: Clients without cash can use their cards, leading to an increase in the average check.
- Expansion of the client base: Modern consumers prefer to use contactless payments, and the lack of this option may drive them to competitors.
- Increased speed of service: Sellers can serve clients faster without spending time counting cash.
- Ensuring security: Cashless payments reduce the risk of receiving counterfeit bills and cash theft.
- Expansion of geography: Online acquiring allows selling services to clients from anywhere in the world.
The only disadvantage of acquiring is the need to pay a commission for its use.