Issuer Vs. Acquirer: What's the Difference?

Do you know the difference between Issuers and Acquirers?

In order for credit and debit card payments to work, two banks are involved.

The issuing bank, or issuer, is the bank that issued you the card.
And the acquiring bank, or acquirer, is the bank that acquires the funds on behalf of the merchant.

Issuing and acquiring services can be offered by traditional banks. But, that’s not always the case. For example, Capital One, the third largest issuer in the United States, didn’t provide retail banking services until 2005.

Issuers and acquirers play distinctly different roles in the payment process.

Issuers:
-approve or deny card applications
-determine credit limits
-verify that funds exist in cardholders’ accounts
-and make decisions about whether to decline or authorize transactions

Acquirers:
-provide and maintain merchant bank accounts
-process payments
-and hold funds for sellers

Both institutions play a role in payment security. They should both deploy tools to detect signs of fraud, money laundering, and other suspicious activity.

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