What is an acquiring bank?

An acquiring bank (or acquirer) is an institution that opens and maintains merchant accounts for businesses willing to accept card payments. It exchanges funds with card holders' banks and pays out funds to the merchant on a basis specified by an appropriate agreement. An acquirer also accepts the risk that the merchant will remain solvent over time, which is why it takes a lot of interest in the merchant's business to determine the probability of refunds and positive account balance.

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