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For the holder of a bank card, the payment procedure with its help is convenient and extremely simple - just insert the card into the POS payment terminal of the outlet, enter the pin code (sometimes this is not required), and the goods are paid for. But interaction with the terminal is only the very beginning of the process of transferring and processing information about the card and a series of checks, the purpose of which is to obtain approval of the payment operation or refuse it.
In a few seconds, the information will pass through the chain of participants in the banking settlement system, which can be geographically located in different cities of the country, and the defining link in this chain is the international payment system. Connecting a point of sale to this banking system of payments, which makes it possible to pay with cards, this is acquiring. In the article we will tell you what it is in simple words, who provides such a service, what are its advantages and disadvantages, and also talk about its various nuances.
Acquiring. What it is?
A bank card is an access tool (key) to a client's bank account. Today every self-respecting bank issues cards, without them it will simply be uncompetitive. International payment systems (IPS) make it possible to accept payments from your card in various parts of the world, provided that the bank that issued it (the issuing bank) becomes a member of such a system. Several IPS are known in the world: Visa, MasterCard, etc. (and which IPS logo is on your plastic?). They all compete with each other, but the principle of operation is the same for all.
Any merchant and service enterprise organizes the acceptance of payments from plastic cards with the help of authorized members of the payment system - acquiring banks. Thanks to such organizations and the corresponding equipment, the buyer gets the opportunity to take advantage of all the benefits of non-cash payment.
Acquiring (from English “acquire” - to acquire, receive) is a banking service that allows a merchant to accept plastic cards as payment for goods or services. In a broader sense, it is a set of activities within the framework of which technological, settlement and information services are provided to merchants for payment transactions with bank cards.
To do this, the merchant enters into an agreement with the acquiring bank, under which the acquirer provides equipment (pos-terminals, software, etc.) and provides the necessary support. He fulfills the following obligations to the trading company:
At the same time, the trading company undertakes to comply with the terms of the concluded acquiring agreement:
How much does it cost to pay with the card? Interchange Fee and other fees
Let's start with the fact that payment with a plastic card for the buyer does not cost anything (except if you withdraw money from a “foreign” ATM). On the contrary, the point of sale incurs costs, and quite significant ones. The cost of making a payment is usually set as a percentage of the payment amount, sometimes a fixed amount is added. The commission is charged both for successful authorization (in the some country) and for rejected authorization (abroad).
The commission payment for each transaction consists of three parts:
The rate is influenced by such factors as:
The IPS commission is already much lower, it is fixed for each transaction and depends on the number of transactions and the amount of payment.
The acquirer's markup depends on the appetite of the bank itself and is assigned by the bank itself.
The IPS charges a commission for various operations not only from the acquirer, but also from the issuer, as a rule, this is closed commercial information, but it is known that they constitute a small part of the total commission for payment by card.
Acquiring types
Today, the following types of acquiring are common:
Merchant acquiring
Merchant acquiring implies direct contact of a cashier (seller) with a customer in the service sector (retail chains, restaurants, cafes, cinemas, hairdressers, etc.). It is organized according to the above-described scheme: an agreement is concluded between the merchant and the acquiring bank, where all the terms of cooperation are prescribed, as well as the amount of the commission charged, which averages 1.5-2.5%. Monoblock or modular pos-terminals are installed for payment at the point of sale .
In a few words, we will tell you how this whole system works when a customer pays with a card, in other words, we will trace the path of a bank transaction:
1. After you have inserted (rolled or leaned) the card into the payment terminal, all the necessary information via communication channels (leased line or GSM modem) is encrypted in encrypted form to the processing center of the acquiring bank (this is not necessarily the bank that issued your map).
2. The acquirer transfers the data to the data processing center (DPC) of the international payment system (to which your card belongs), where the card is checked for its presence / absence in the stop list, and if the transaction is refused, the transaction is returned back, and if approved, the data is transferred to the next participant in the settlement system - the issuing bank. Pay attention to the role of the payment system - it connects all banks participating in card payments into one chain.
3. IPS transmits information to the authorization center of the issuing bank, where the card is authorized: extended verification of card details (legality, the likelihood of fraud - fraud, available balance on the card account, coincidence of the pin code, etc.). The purpose of this step is to generate an authorization code that will speak of authorizing payment or refusal, and sending it back along the same chain: through the IPS to the acquiring bank.
4. As soon as the acquirer receives a response, the payment transaction is approved or rejected. All payment details, including the authorization code, will be present on the receipt printed by the pos-terminal.
Despite the fact that the purchase will be paid at that moment, the actual mutual settlement between the banks will take place only after a few days, during which the funds on the buyer's card account will "hang" in the hold (freeze). The acquirer will transfer money to the current account of the outlet within 1-3 days (depending on the acquiring agreement), withholding the commission. And he will receive money from the issuing bank only after he sends the latter (through the IPS) files for debiting (clearing files) - documents confirming the operations performed. As soon as the issuer receives these documents, the money on the buyer's accounts is unfrozen and debited (transferred through the settlement center to the acquirer's account).
Mobile acquiring
Mobile acquiring is used to pay with cards "on the road" (couriers, taxi drivers, field service, etc.), or when you need a budget solution for organizing card payments in retail outlets with low turnover, in mobile stores. Working with cards is carried out through a mobile pos-terminal (mPOS), which connects to a smartphone via WI-FI or Bluetooth (other solutions are also possible), and the terminal is controlled using a special mobile application installed on the phone.
As a rule, well-known banks act as acquiring banks. There are the following services that provide such services: iPay, Sum Up, Pay Me, 2Can, SimplePay, LifePay, Termit, ibox, Paybyway and RBK Card. Despite the fact that the amount of commission in this case will be higher compared to merchant acquiring (approximately 2-3.5%), but the advantage is obvious: the possibility for a short period of time and at low initial costs to organize payment by plastic cards by gluing showcases on the glass sticker "Visa / Mastercard / MIR cards are accepted here." The principle of operation is similar to that described above.
Internet acquiring (virtual)
Internet acquiring is used to pay for goods and services in online stores. In this case, the role of the terminal uses the web interface (software) located on the seller's website. As a rule, the buyer is provided with several payment methods: cards (including virtual ones), electronic money and other methods. The program used for online settlements must comply with modern security standards and use secure (encrypted) communication protocols. Such programs are provided by payment providers (processing companies), whose activities are supported by certificates from well-known payment systems Visa and MasterCard. When choosing this type of acquiring, the seller must pay a commission to the acquiring bank in the amount of 3-6% of the transferred amount.
ATM acquiring
It is used in payment terminals and ATMs, where you can transfer money from a card, pay for various services using it, or withdraw cash. The principle of operation is generally comparable to that of merchant acquiring. See the link above for details.
Advantages and disadvantages
For any merchant, the connection to the acquiring service is, first of all, an increase in competitiveness and an increase in trade turnover. It has long been noticed by marketers that the average cost of a buyer paying by bank transfer is 10-20% higher than when paying for cash. The lack (even temporary) of the opportunity to pay for plastic will cause the merchant not only monetary, but also reputational damage.
This service allows, among other things:
Problem situations can often arise on the side that accepts payments, especially when paying on the Internet or through a mobile terminal. In these cases, the risks of compromising your card are much higher. In general, there is where to move forward and where to develop, the only embarrassing thing is that people, according to the latest polls, do not really want to give up cash, but this, most likely, is a matter of time.
- 1. Acquiring. What it is?
- 2. How much does it cost to pay with the card? Interchange Fee and other fees
- 3. Types of acquiring
- 3.1 Merchant acquiring
- 3.2 Mobile acquiring
- 3.3 Internet acquiring (virtual)
- 3.4 ATM acquiring
- 4. Advantages and disadvantages
For the holder of a bank card, the payment procedure with its help is convenient and extremely simple - just insert the card into the POS payment terminal of the outlet, enter the pin code (sometimes this is not required), and the goods are paid for. But interaction with the terminal is only the very beginning of the process of transferring and processing information about the card and a series of checks, the purpose of which is to obtain approval of the payment operation or refuse it.
In a few seconds, the information will pass through the chain of participants in the banking settlement system, which can be geographically located in different cities of the country, and the defining link in this chain is the international payment system. Connecting a point of sale to this banking system of payments, which makes it possible to pay with cards, this is acquiring. In the article we will tell you what it is in simple words, who provides such a service, what are its advantages and disadvantages, and also talk about its various nuances.
Acquiring. What it is?
A bank card is an access tool (key) to a client's bank account. Today every self-respecting bank issues cards, without them it will simply be uncompetitive. International payment systems (IPS) make it possible to accept payments from your card in various parts of the world, provided that the bank that issued it (the issuing bank) becomes a member of such a system. Several IPS are known in the world: Visa, MasterCard, etc. (and which IPS logo is on your plastic?). They all compete with each other, but the principle of operation is the same for all.
Any merchant and service enterprise organizes the acceptance of payments from plastic cards with the help of authorized members of the payment system - acquiring banks. Thanks to such organizations and the corresponding equipment, the buyer gets the opportunity to take advantage of all the benefits of non-cash payment.
Acquiring (from English “acquire” - to acquire, receive) is a banking service that allows a merchant to accept plastic cards as payment for goods or services. In a broader sense, it is a set of activities within the framework of which technological, settlement and information services are provided to merchants for payment transactions with bank cards.
To do this, the merchant enters into an agreement with the acquiring bank, under which the acquirer provides equipment (pos-terminals, software, etc.) and provides the necessary support. He fulfills the following obligations to the trading company:
- Installation and configuration of equipment for organizing payment by cards (pos-terminals can be provided free of charge or on a lease, buyout basis - depending on the planned trade turnover);
- Training of merchant employees to work with cards (payment operations, refunds, etc.) and transfer of information materials;
- Provision of the necessary consumables;
- Service maintenance and information and reference support (as a rule, round-the-clock).
At the same time, the trading company undertakes to comply with the terms of the concluded acquiring agreement:
- Provide the placement of the payment equipment of the acquiring bank (terminals, communication devices, etc.);
- Accept payments using installed equipment;
- Timely report about its malfunctions, etc.
How much does it cost to pay with the card? Interchange Fee and other fees
Let's start with the fact that payment with a plastic card for the buyer does not cost anything (except if you withdraw money from a “foreign” ATM). On the contrary, the point of sale incurs costs, and quite significant ones. The cost of making a payment is usually set as a percentage of the payment amount, sometimes a fixed amount is added. The commission is charged both for successful authorization (in the some country) and for rejected authorization (abroad).
The commission payment for each transaction consists of three parts:
- Interchange Fee is a commission for the operation that the issuing bank (which issued the holder's card) receives;
- Commission of an international payment system (for example, Visa or Mastercard);
- Commission (margin) of the acquiring bank or agents.
The rate is influenced by such factors as:
- payment security - the commission will be lower when paying through pos-terminals at the cash desks of stores than, for example, in an online store, and if there is an additional authentication protocol (3D Secure), the rate is reduced;
- type of outlet - grocery stores have a lower rate compared, for example, with stores selling electronics, since the risks of returning goods in the first case are close to zero, and in the second case, it is a common thing;
- type of card (the credit rate is higher than the debit one) and its status (budget, classic, gold, etc. - in ascending order);
- turnover in a trading enterprise, etc.
The IPS commission is already much lower, it is fixed for each transaction and depends on the number of transactions and the amount of payment.
The acquirer's markup depends on the appetite of the bank itself and is assigned by the bank itself.
The IPS charges a commission for various operations not only from the acquirer, but also from the issuer, as a rule, this is closed commercial information, but it is known that they constitute a small part of the total commission for payment by card.
Acquiring types
Today, the following types of acquiring are common:
- trade;
- mobile;
- Internet acquiring (virtual);
- ATM acquiring.
Merchant acquiring
Merchant acquiring implies direct contact of a cashier (seller) with a customer in the service sector (retail chains, restaurants, cafes, cinemas, hairdressers, etc.). It is organized according to the above-described scheme: an agreement is concluded between the merchant and the acquiring bank, where all the terms of cooperation are prescribed, as well as the amount of the commission charged, which averages 1.5-2.5%. Monoblock or modular pos-terminals are installed for payment at the point of sale .
In a few words, we will tell you how this whole system works when a customer pays with a card, in other words, we will trace the path of a bank transaction:
1. After you have inserted (rolled or leaned) the card into the payment terminal, all the necessary information via communication channels (leased line or GSM modem) is encrypted in encrypted form to the processing center of the acquiring bank (this is not necessarily the bank that issued your map).
2. The acquirer transfers the data to the data processing center (DPC) of the international payment system (to which your card belongs), where the card is checked for its presence / absence in the stop list, and if the transaction is refused, the transaction is returned back, and if approved, the data is transferred to the next participant in the settlement system - the issuing bank. Pay attention to the role of the payment system - it connects all banks participating in card payments into one chain.
3. IPS transmits information to the authorization center of the issuing bank, where the card is authorized: extended verification of card details (legality, the likelihood of fraud - fraud, available balance on the card account, coincidence of the pin code, etc.). The purpose of this step is to generate an authorization code that will speak of authorizing payment or refusal, and sending it back along the same chain: through the IPS to the acquiring bank.
4. As soon as the acquirer receives a response, the payment transaction is approved or rejected. All payment details, including the authorization code, will be present on the receipt printed by the pos-terminal.
Despite the fact that the purchase will be paid at that moment, the actual mutual settlement between the banks will take place only after a few days, during which the funds on the buyer's card account will "hang" in the hold (freeze). The acquirer will transfer money to the current account of the outlet within 1-3 days (depending on the acquiring agreement), withholding the commission. And he will receive money from the issuing bank only after he sends the latter (through the IPS) files for debiting (clearing files) - documents confirming the operations performed. As soon as the issuer receives these documents, the money on the buyer's accounts is unfrozen and debited (transferred through the settlement center to the acquirer's account).
Mobile acquiring
Mobile acquiring is used to pay with cards "on the road" (couriers, taxi drivers, field service, etc.), or when you need a budget solution for organizing card payments in retail outlets with low turnover, in mobile stores. Working with cards is carried out through a mobile pos-terminal (mPOS), which connects to a smartphone via WI-FI or Bluetooth (other solutions are also possible), and the terminal is controlled using a special mobile application installed on the phone.
As a rule, well-known banks act as acquiring banks. There are the following services that provide such services: iPay, Sum Up, Pay Me, 2Can, SimplePay, LifePay, Termit, ibox, Paybyway and RBK Card. Despite the fact that the amount of commission in this case will be higher compared to merchant acquiring (approximately 2-3.5%), but the advantage is obvious: the possibility for a short period of time and at low initial costs to organize payment by plastic cards by gluing showcases on the glass sticker "Visa / Mastercard / MIR cards are accepted here." The principle of operation is similar to that described above.
Internet acquiring (virtual)
Internet acquiring is used to pay for goods and services in online stores. In this case, the role of the terminal uses the web interface (software) located on the seller's website. As a rule, the buyer is provided with several payment methods: cards (including virtual ones), electronic money and other methods. The program used for online settlements must comply with modern security standards and use secure (encrypted) communication protocols. Such programs are provided by payment providers (processing companies), whose activities are supported by certificates from well-known payment systems Visa and MasterCard. When choosing this type of acquiring, the seller must pay a commission to the acquiring bank in the amount of 3-6% of the transferred amount.
ATM acquiring
It is used in payment terminals and ATMs, where you can transfer money from a card, pay for various services using it, or withdraw cash. The principle of operation is generally comparable to that of merchant acquiring. See the link above for details.
Advantages and disadvantages
For any merchant, the connection to the acquiring service is, first of all, an increase in competitiveness and an increase in trade turnover. It has long been noticed by marketers that the average cost of a buyer paying by bank transfer is 10-20% higher than when paying for cash. The lack (even temporary) of the opportunity to pay for plastic will cause the merchant not only monetary, but also reputational damage.
This service allows, among other things:
- Reduce collection costs (some of them will be spent on commission, but it is still more profitable than working in cash, at least for a point with an average turnover and above);
- Reduce fraud with cash (you cannot pay with fake banknotes on a card, and stealing plastic is not equivalent to stealing a wallet with cash - the card can be quickly blocked);
- Improve the quality of customer service (at least the speed of payment increases and the time spent in queues decreases, and you can completely forget about delivery!);
- To increase the average purchase amount and the customer's purchasing power (for example, on a credit card, a person spends not his own money, but borrowed money, which also increases the average check, in addition, the presence of various loyalty programs stimulates the buyer to spend even more);
- Attract new customers, bank card holders, at least from those (already few) competitors who still do not accept cards for payment.
Problem situations can often arise on the side that accepts payments, especially when paying on the Internet or through a mobile terminal. In these cases, the risks of compromising your card are much higher. In general, there is where to move forward and where to develop, the only embarrassing thing is that people, according to the latest polls, do not really want to give up cash, but this, most likely, is a matter of time.
