Payment processing happens between issuers and acquirers. In short, an issuer is a customer’s bank while an acquirer is a merchant’s bank. Acquirers receive payments from issuers to complete transactions.

What is an Issuer?

A customer purchases a product from your eCommerce store. Their payment comes from one of their accounts. The bank that holds the customer’s account is the issuer.

Issuers do more than facilitating payments. They represent customers in disputes and issue credit cards.

hat is an Acquirer?

Your merchant account bank is an acquirer. The acquirer is the receiving end of payments from customers.

Acquirers provide merchant accounts and other financial tools that help businesses process payments.

How Do Issuers and Acquirers Work Together?

The communication between issuers and acquirers in payment processing is simple. This makes processing easier for both customers and merchants.

Step One: Process Payment to the Acquirer

Payment processors like Revitpay run transactions to acquirers. Merchants partner up with payment processors to facilitate payments towards their merchant accounts.

Step Two: Acquirers Forwards Transaction to Card Network

The four primary card networks in the U.S. are Visa, Mastercard, Discover, and American Express. Acquirers forward transactions to the paying client’s card network.

Why are card networks involved in payment processing? These networks bridge the communication between issuing and acquiring banks. They have their own processes for settling disputes.

Step Three: Transaction Goes from Card Network to Issuer

Once card networks receive a transaction from an acquirer, they then forward it to the customer’s bank. This issuing bank is the one that issued a corresponding card to the customer.

The issuer then releases funds from the customer’s account. The credit is ready to go to the acquirer.

Step Four: Processed Again through Card Network and Processor

Credit from the issuer goes back through the client’s corresponding card network. Then, the card network will send the transaction through a payment processor so that the funds can go to the acquirer. The acquirer will then credit the merchant account.

Issuers, Acquirers, and Fees 

Interchange fees and other processing fees are collected by card networks and issuing banks. Merchants are responsible for these fees. Issuers may collect a fee amount from transactions before it processes into the merchant account.

Interchange fees cover the risk that card networks and banks take when they process payments. There are many cases where the client doesn’t have sufficient funds to cover a transaction. The issuing bank then covers for the customer. This is credit coming out of the bank’s pocket until they can collect debt from the customer.

Claims Resolution

Issuers, acquirers, and card networks are involved in disputes from customers.

The issuer and acquirer represent the corresponding account holders. In the case of a dispute, the issuer alerts the card network which then notifies the acquirer. The issuer and acquirer go back and forth with evidence to support their claim. The card network is the neutral party that makes the final decision. Visa’s updated claims resolution workflow showcases how they play a role in disputes.

High Risk Acquirers

Acquirers face the chance of late or missing payments from the customer. This can occur through fraud and mistakes. High risk merchants are more likely to have disputes filed against them. 

High risk merchants need high risk acquirers to provide merchant accounts. Working with a specialized bank and payment processor like Revitpay gets you the tools and help you need for a successful business. 

Need help finding a high risk acquirer? Revitpay has your solution. Contact us today for more information on how we can help you.