Acquiring Bank vs Issuing Bank
Acquiring Bank and Issuing Bank are easy to mix up. Here are both definitions from the HighRisk Media glossary side by side.
Comparison table
| Term | Acquiring Bank | Issuing Bank |
|---|---|---|
| Full name | — | — |
| In short | An acquiring bank is a bank that connects a business to card payment acceptance, signs an acquiring agreement with it, processes transactions and is responsible for settlements with the merchant. | An issuing bank is the bank that issues a payment card to a customer, maintains the account, and decides whether to approve card transactions. On the other side of a payment is the acquiring bank, which serves the merchant. |
| Verticals | Fintech, Gambling, Betting | Fintech |
What is Acquiring Bank?
Acquiring bank (acquirer) is a financial institution that opens a merchant account for a seller and accepts card payments made under the card schemes on the seller's behalf. The buyer's money passes through the acquiring bank and is then credited to the seller minus a fee. The acquiring bank is liable to the card schemes for everything that happens with the transactions of its merchants.
What is Issuing Bank?
An issuing bank is a financial institution that issues a payment card or other payment instrument to a cardholder and is responsible for the account from which funds are debited. Issuance takes place under an agreement with the customer. The first digits of a card number (the BIN) tell the payment system which issuer stands behind the card.