Payments4 min readUpdated October 15, 2026

What Is Card Acquiring?

What card acquiring covers, a 7-step card acquiring flowchart, how PSD2 and US bank regulators treat it, and direct vs indirect acquiring.

Nick Bonnassies, CMO at Tagada · checked against 3 sources

Article summary

TL;DR

Card acquiring is the business of contracting with merchants so they can accept card payments. The acquirer signs and vets the merchant, sends its authorizations and clearing records to the card networks, pays the merchant after settlement and answers to the network for chargebacks. In the EU it is a licensed payment service; in the US, acquirers are banks.

Card acquiring is the merchant side of a card payment: contract, risk review, authorization routing, clearing, settlement and disputes.
Visa requires a merchant agreement and a due diligence review before an acquirer signs a merchant.
In the EU, acquiring is a payment service under PSD2, so only licensed payment service providers such as banks and payment institutions may offer it.
In the US, the acquirer is a bank, supervised by bank regulators. If a merchant can't pay its chargebacks, that bank pays the issuer.

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On this page

Every card sale has two banks behind it: one for the cardholder, one for the merchant. Card acquiring is the merchant side. This page defines the activity, maps its steps and shows how the EU and US regulate it.

What card acquiring covers

PSD2, the EU payments law, gives the cleanest definition. "Acquiring of payment transactions" is "a payment service provided by a payment service provider contracting with a payee to accept and process payment transactions, which results in a transfer of funds to the payee".1 In plain terms, the acquirer signs the merchant, takes its payments and pays it.

Visa uses the same idea. Its acquirer is "a Member that signs a Merchant or Payment Facilitator [...] and directly or indirectly enters a Transaction into Interchange."2 The business covers five jobs:

Contracting the merchant and opening its merchant account.
Routing each authorization to the card network.
Clearing: submitting the final transaction records.
Settlement: receiving funds from the issuer side and paying the merchant.
Risk: the acquirer answers for the merchant's chargebacks. If a merchant cannot honor them, "the acquiring bank must pay the card-issuing bank."3

Many acquirers hire processors for the technical work. Who does what is covered on our acquirer processing page.

Card acquiring business flowchart

Merchant applies. It signs a merchant agreement. Visa requires one with each merchant.
Acquirer vets it. Before contracting, Visa requires "an adequate due diligence review" of the merchant. This is underwriting.
Merchant connects. A terminal in store, or a gateway at an online checkout.
Authorization. The acquirer sends each request through the network to the issuer, which approves or declines.
Clearing. The acquirer submits the completed sales to the network.
Settlement. Funds reach the acquirer, which pays the merchant under its contract.
Disputes. Chargebacks come back to the acquirer, which recovers them from the merchant.

Sources: Visa Core Rules, April 2026, sections 1.5.2.1 and 5.2.1.2; OCC Merchant Processing, pages 2 and 14.

Card acquiring regulations: EU and US

	European Union	United States
Legal status	A payment service (PSD2, Annex I, point 5)	Bank activity; the acquirer is a bank
Who may offer it	Licensed payment service providers, such as credit institutions and payment institutions	Banks that are card network members
Supervisor	National competent authority	Bank regulators, such as the OCC for national banks

PSD2 lists "Issuing of payment instruments and/or acquiring of payment transactions" as payment service number 5 and bars anyone who is not a payment service provider from offering it (Article 37).1 Recital 10 adds that "the mere processing and storage of data or the operation of terminals" is not acquiring.1 The OCC defines an acquiring bank as one "that contracts with merchants for the settlement of card transactions."3 Our PSD2 page covers the rest of the directive.

Direct vs indirect acquiring. Acquiring banks "contract directly with merchants, or indirectly through agent banks or other third-party organizations", such as a payment facilitator.3

Acquiring vs issuing. PSD2 defines issuing as contracting with the payer to provide a payment instrument. Acquiring contracts with the payee.1 See card issuing.

Local, cross-border and global acquiring. Whether a sale is domestic depends on where the issuer and the merchant outlet are. See local acquiring.

What it means for an online merchant

Your acquirer carries your chargeback risk, so it reviews you before you go live and watches your disputes after. Many online merchants reach acquiring through a payment service provider rather than a bank contract. Either way, the acquirer decides whether your sales enter the network.

How Tagada helps

Several processors behind one checkout

Tagada routes payments across TagadaPay and processors such as Stripe, NMI and Airwallex with one logic, and cascades to another processor when one is down or times out. Each file is still underwritten, with enhanced review on regulated verticals. Tagada follows Visa and Mastercard rules and the laws that apply to payments.

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Updated on October 15, 2026

Nick Bonnassies

CMO at Tagada

CMO at Tagada. Before Tagada, Nick built direct-to-consumer brands that generated over $115M in sales, raised over $25M in crowdfunding and sold two of them. He also works as a fractional CMO on marketing operations and AI systems.

Frequently asked questions

What is direct card acquiring?

The merchant signs its card acceptance contract directly with the acquiring bank. In indirect acquiring, the merchant goes through an intermediary, such as a payment facilitator or another third party, that holds the contract with the bank. The US bank regulator describes both: acquiring banks contract with merchants directly or through third parties.

What is a card acquiring institution?

A bank or licensed payment institution that is a member of a card network and signs merchants. Visa calls it an acquirer: a member that signs a merchant or payment facilitator and enters its transactions into interchange. In the EU, it must hold a payment service licence.

What is global card acquiring?

One acquirer, or one provider, processing card payments for shoppers in many countries. When the card comes from another country than the merchant outlet, the sale is cross-border. Local acquiring uses an acquirer in the shopper's country instead. Our local acquiring page compares the two.

Is a payment gateway an acquirer?

No. A gateway carries card data from the checkout to the processor. PSD2 says technical services such as processing and storing data or operating terminals are not acquiring. The acquirer is the one that contracts with the merchant and pays it.

Sources

Checked October 15, 2026

TagadaPay

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