Many credit card issuing banks hire third-party processors as “acquirers.” The acquirers manage the merchant account transactions and processes. The computer network that is used for these financial transactions is called the “acquirer zone.”
Four Key Entities Are Part of Credit Card Processing
When a customer swipes his credit card at a merchant point-of-sale (POS) terminal, it seems like there are only two parties to the transaction: buyer and seller. The truth is that most modern credit card processing transactions actually involve four different parties: 1. Credit Card Issuer, 2. Credit Card Holder, 3. Merchant and 4. Acquirer. The acquirer role is primarily behind-the-scenes, but is essential to ensuring that the financial transaction is completed properly.
When the customer swipes his credit card, the data is sent to the merchant POS terminal. Next, the terminal will send it to the acquirer computer network. The acquirer has the job of verifying, validating and authorizing the funds transfer to the merchant account.
Expanded Acquirer Powers
As the use of credit cards has expanded, the powers of the acquirer have expanded. Some acquirers offer their own stored value cards and electronic POS PIN devices. A company may be both an issuer and an acquirer.
Each credit card company has its own network of acquirers. Financial transaction processes vary according to whether acquirers are part of the network on which the credit card is being processed or not.
What does the Acquirer Zone consist of?
Once the customer’s credit card information reaches the acquirer electronic system – computers, terminals, switches and routers – it becomes part of the “acquirer zone.” Data within this zone is under the control of the acquirer. The acquirer will check to see if all of the identifications are correct and if there are enough funds to complete the transaction.
For the sake of billing, the acquirer can refer to the time that the data spent in its zone. After validating the credit card brand and customer, the acquirer will send its authorization for funds transfer to the merchant account. The store will notify the customer and provide a paper receipt documenting the credit card processing transaction.