Acquiring Bank
An acquiring bank (or acquirer) is the financial institution that processes card payments on behalf of a merchant, settling transaction funds to the merchant after deducting its fees.
In the card payment flow: the customer's card is charged → the card network (Visa/Mastercard) routes the transaction → the acquiring bank processes it for the merchant → the acquiring bank pays interchange to the issuing bank → the acquiring bank settles net funds to the merchant.
The acquirer's economics come from the spread between what merchants pay in processing fees and what the acquirer pays to the card network and issuing bank. In flat-rate pricing (Stripe), the acquirer captures the spread between the flat rate and actual interchange. In interchange-plus pricing, the acquirer earns only its transparent markup.
For embedded finance, understanding the acquirer relationship is important for PayFac programs — the PayFac operates as a master merchant under the acquirer, and the acquirer's underwriting standards, chargeback policies, and fee structures define the PayFac's operating constraints.