Introduction

This article explains the role of an acquirer in the credit and debit card transaction process and clarifies how Cybersource fits into the payment processing framework. It is intended to help merchants understand the relationship between acquirers, merchant accounts, and payment gateways so they can better navigate the flow of funds and roles involved in processing transactions.

Definition of an Acquirer

An acquirer, also known as a merchant acquiring bank, is a financial institution responsible for processing credit and debit card transactions on behalf of merchants. The acquirer receives payment proceeds from the customer's card-issuing bank and deposits them into the merchant's account.

Within this credit card processing framework, Cybersource acts as the Payment Gateway, transmitting payment information from the merchants to the appropriate parties for authorization and settlement.

Definition of a Merchant Account

A merchant account is a bank account provided by an acquirer to hold funds from the proceeds of payment transactions. This account is where the acquirer deposits the funds collected from customer card transactions before they are made available to the merchant.

How These Components Work Together

The following entities each play a distinct role in the payment processing flow:

• Acquirer (Merchant Acquiring Bank): Processes card transactions and deposits funds into the merchant account.
• Merchant Account: Holds the funds received from completed payment transactions.
• Cybersource (Payment Gateway): Transmits payment information from the merchant to the acquirer and card networks.
• Issuing Bank: The customer's card-issuing financial institution that releases funds to the acquirer.

Potential Client Questions

• What is an acquirer?
  • An acquirer, also called a merchant acquiring bank, is a financial institution that processes credit and debit card transactions on behalf of merchants and deposits the proceeds into the merchant's account.
• What is a merchant account?
  • A merchant account is a bank account provided by an acquirer to hold funds from the proceeds of payment transactions.
• What role does Cybersource play in this process?
  • Cybersource acts as the Payment Gateway, transmitting payment information from the merchant within the credit card processing framework.
• Where do the funds from a card transaction come from?
  • The acquirer receives the payment proceeds from the customer's card-issuing bank and then deposits the funds into the merchant's account.
• Is the acquirer the same as the payment gateway?
  • No. The acquirer is the financial institution that processes transactions and handles the movement of funds, while the payment gateway (such as Cybersource) transmits payment information between the merchant and the acquirer.