ACQUIRING PROCESSOR Meaning and
Definition
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An acquiring processor, also known as an acquiring bank or acquirer, is a financial institution or entity that facilitates and manages electronic payment transactions for merchants. It acts as an intermediary between the merchant and the issuing bank, facilitating the authorization, settlement, and funding of card-based transactions.
The acquiring processor plays a crucial role in the payment ecosystem. It is responsible for establishing relationships with merchants, enabling them to accept various forms of electronic payments, including debit and credit cards. By partnering with acquiring processors, merchants gain the ability to offer convenient payment options to their customers.
When a customer makes a payment at a merchant's point of sale (POS) terminal or through an online platform, the acquiring processor carries out a series of processes to complete the transaction. It obtains authorization from the customer's issuing bank, verifying the availability of funds, and ensures that the transaction meets security requirements. The acquiring processor then settles the funds by depositing them into the merchant's account, typically after deducting certain fees.
The acquiring processor also provides services such as equipment leasing, customer support, fraud monitoring, and chargeback management. It maintains compliance with industry standards and regulations to ensure secure and reliable payment processing.
In summary, an acquiring processor is a financial institution that facilitates electronic payment transactions for merchants, managing the authorization, settlement, and funding of card-based transactions while providing related services and ensuring compliance.
Etymology of ACQUIRING PROCESSOR
The word "acquiring" comes from the Old French word "acquerre" which means "to acquire, obtain, gain". It originated from the Latin word "acquirere" which has the same meaning. The word "processor" comes from the English word "process", which comes from the Latin word "processus" meaning "a going forward, advance, progress, or procedure". The combination of these two words forms the term "acquiring processor", which typically refers to a device or system that handles the processing of transactions for acquiring banks in the payment industry.
