Acquiring Financial Institution

An acquiring financial institution is another name for an acquirer. The acquiring financial institution makes a contract between the merchant that is making transactions, and the bank that is processing the transactions. This contract allows the merchant to process credit card transactions through the contracted bank.

Each day the acquiring financial institution will deposit the total from all credit card transactions with the bank. They also deduct any monthly processing fees from the total amount of the deposit. The merchant then has the remaining amount in their bank account to use to run their business.

When an acquiring financial institution approaches your business, do some homework on the company before signing a contract. You want to make sure that the acquiring financial institution has reasonable fees compared to their competitors. Remember, the job of the acquiring financial institution is to acquire new merchants for the banks they represent, so they are going to do all they can to sign up your business for their services!

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