What is acquiring and how it works

From our side everything looks quite simple – we insert the plastic in the terminal, enter the pin-code, and after the device “Successfully” we take it out. That’s it, the purchase is paid for. So it looks through the eyes of the buyer. And what actually happens, how the system works and who provides services? Still have to figure out how to connect and do not forget the important nuances. Let’s talk about all this and what this device is good for business.

What the word “acquiring” means and why we need it

Derived from “acquire” and means “to receive.” This word usually refers to the ability of a business to collect payment in non-cash form. It also refers to the servicing of transactions. In the early ’90s, the largest banks began offering customers to purchase MasterCard. At the same time, terminals appeared in which you could pay with the “plastic”.

If initially the card was only for quick withdrawal of money from the account, then over time another function appeared – to pay in stores. But this is only part of a huge working structure. About international payment systems – International payment systems by Kirill Yurovskiy.

What is this – an acquiring system

Used in the banking sector as the definition of a way to pay with special cards. It means that you can pay for any item simply by attaching a “piece of plastic” with a chip to a special device. There is no need to carry cash, finances are deducted directly from the account.

Main advantages of operation:

  • Convenient. The visitor is not looking for the necessary amount of money in his pockets, and is not afraid that it will be stolen. Just takes it out and uses it.
  • No change. A person who buys doesn’t get a purse full of change and doesn’t get cheated. You will be charged exactly the cost of acquisition, no more.
  • The breadth of use. Any institution has the right to sign a contract for the appropriate services from the bank.
  • No risk. A simple way to avoid accepting counterfeit bills.
  • Speed. So the procedure is many times faster than the standard one – to take money from the client, count out his change.
  • Less expenditure on collection agents. Cash does not need to be handed over – it is simply gone.

What is an acquiring transaction – acceptance of a bank product as a means by which goods are paid for. The finances are then transferred to the selling party.

What actually happens:

  • The card is attached;
  • The buyer’s details are transferred to the banking center;
  • The balance is checked;
  • The purchase price is deducted;
  • The buyer receives a receipt.

History of implementation

This invention turned out to be unexpectedly convenient and in demand, and began to replace paper money. But initially, acquiring was much simpler, with limited functionality. The first type of use involved removing a paper slip from plastic.

It was an insecure method – the seller never knew for sure if the required amount was in the account. Of course, if you made a large purchase you could call the bank back and ask, but if you did it often, the queue would grow many times larger.

The meaning of the word “acquiring” became clearer, when there appeared secure electronic devices which provided an instant connection to the banking sphere. It became easier and faster to work.

Application in today’s environment

Full service is now settlement, technology and information assistance. A whole system provides for the preparation of payments and their further maintenance. First, you need to sign a contract with the one who provides the relevant services – the acquirer. Usually it is a banking institution with payment terminals.

They are installed in the place indicated by the director or an authorized employee. This is the counter of a store, a restaurant where the equipment is brought by waiters, or any other place near the cash register.

Who and what is involved in the process

Usually there are six participants:

  • Point. The establishment where the pin pad will work. Initiates the connection and pays the usage fee.
  • Bank acquirer. The organization digitalnewshour where the initiator’s account is opened. It also issues and maintains the equipment to accept non-cash payments. The bank requires registration in an internationally accredited payment system. Their task is to set up the processes so that all payments will go quickly and without difficulties.
  • Issuing bank. The financial company that issued the plastic products with chips and magnetic tapes to be accepted for payment. Responsible for ensuring that all settlements are correct regarding the purchase.
  • Customer. The person or entity who puts the card to the terminal and pays for the product or service. The cardholder of the issuing bank.
  • POS or pin-pad. A technique that accepts “plastic”. Contains a keyboard that reads and prints checks.
  • Acquiring operations are all readings and debits of the customer’s money.

What types are there?

Technology is constantly evolving and gradually four varieties have emerged:

  • commercial;
  • mobile;
  • Internet;
  • exchange.

Each business independently chooses one or more that they will need in their activities. Each type has its own advantages and disadvantages. It is possible to connect additional functions in the course of the company’s activities.


One of the most popular. It is installed in establishments of any orientation, coffee shops and restaurants, gas stations. Almost every firm after opening aspires to put at itself a pin-pad.

It is needed for expenditure and return operations if the buyer did not like the goods. No restrictions on the amounts that will pass through the bank. A small percentage of each incoming payment is deducted as a commission, since the work of the banking organization is never free for the customer.


Its concept includes the ability of a smartphone to work as a pin-pad. All calculations are made with the help of cellular phones, the employee is not tied to the store and the counter. Suitable for companies with some employees working remotely. It is profitable when their task is to deliver the goods to the final consumer and get a cashless payment on the spot.

On the one hand, the staff does not have to tie the terminal to the cash register. On the other hand – for each successful withdrawal takes a percentage, as a commission for the services of a bank – 2-3% of the transaction.


So fantastic 100 years ago and so familiar in the modern world is the ability to pay for products without leaving home. Now any user of the global network can buy anything that is on sale there, if he has a bank card with the right amount of money on the account.

Many firms are trying to create a payment interface on their own sites. The more comfortable will be the visitor to the page, the more likely it will close it after the purchase of the product. It is possible to pay by this method everything odishadiscoms that is exposed on the net – from apples to complex services and bills.

This method requires no equipment and no maintenance costs. But the commission is higher – up to 6% in different banking institutions. Such a rate is due to additional protection against fraudsters and hackers.

Exchange variety

The most popular type of all. This is payroll payments to “plastic”. Each employee, who gets a job, is given a current account and issued a card. Twice a month, an amount equal to his salary will be transferred there.

To get cash, you just insert the card into an ATM or go to the office with your passport. A pin-code is entered. A menu opens with options:

  • balance check;
  • withdrawal;
  • top up;
  • other operations – payment of bills, loans, transfer to an acquaintance.

The employee can dispose of the funds as he or she wishes. The important condition is to insert the plastic in the terminal of the bank that opened the current account. It is often allowed to use ATMs of third-party financial institutions, but they charge an additional fee for cash withdrawals, sometimes quite a large one.

Advantages and disadvantages

If you compare cash and cashless payment, most users and companies have already appreciated its comfort and convenience, lack of problems with change and other advantages:

  • The acceptance of counterfeit bills is excluded;
  • The transaction is carried out fast;
  • There is no need to count the banknotes – all at once in the account;
  • Collection service is minimal;
  • No offsettings – the teller doesn’t cheat with change;
  • Comfortable – it is enough to attach or insert a pin-pad to make a payment.

In addition, it is proved that people pay more willingly by non-cash. Owners of “plastic” more often make rash expenditures, especially on payday.

But there are also disadvantages, which have to be reconciled with:

  • Unstable. Sometimes a failure occurs and the terminal fails. Customers begin to resent it. In a regular store, it is temporarily allowed to switch to full cash payment, in other types you have to look for ways to solve the problem quickly.
  • Secure. Banks are constantly looking for security enhancements to keep accounts from being hacked by hackers. Occasionally this happens, but customers are no more protected when paying in cash, either.
  • Complicated. Cash requires considerably less knowledge of computers and other devices. Employees will have to be trained and unafraid of technology to use the novelty successfully.

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