Issuer vs acquirer: What’s the difference?

Both the acquiring bank and the issuing bank are involved in every transaction, but they serve different customers and carry different responsibilities. Knowing who does what in the payment chain helps merchants better evaluate payment providers, manage costs, and meet compliance standards.

Roles in payment processing

What is an acquirer?

A merchant acquirer, also called an acquiring bank, enables businesses to accept card payments. Licensed by card networks such as Visa and Mastercard, the acquirer connects the merchant to the payment system and makes sure transactions can be processed.

Its responsibilities include:

• Reviewing and approving merchants before they can accept cards, and ensuring they follow card scheme rules.
• Monitoring risk, such as chargebacks or fraudulent transactions.
• Transferring funds to the merchant’s account once transactions are cleared, minus agreed fees.

In practice, the acquirer is the bank that works on behalf of the merchant.

What is an issuer?

An issuing bank provides payment cards directly to consumers. This can be a debit card linked to a current account or a credit card that allows borrowing. During a transaction, the issuer:

• Authorises the payment request.
• Confirms the cardholder’s identity and available balance or credit.
• Covers the risk if the customer defaults or commits fraud.

Put simply, the issuer represents the cardholder when a payment is made.

How a card transaction flows

Start of transaction and gateway capture

Whether in-store or online, the first step in the payment process is capturing the card details. This is handled by a payment gateway, which encrypts and transmits the information to a processor. 

At the same time, the merchant acquirer maintains the merchant’s account, ready to receive funds once the payment clears.

Authorisation through the card network

Next, the processor moves the data between the gateway, the acquirer, and the card network (such as Visa or Mastercard). The network forwards the request to the issuing bank, which runs a few quick checks: Is the card active? Has the cardholder been authenticated? Are there enough funds or credit available?

Based on those checks, the issuer approves or declines the transaction. The response flows back through the network, to the acquirer, and finally to the merchant’s terminal or checkout page.

Clearing and settlement

Once approved, the transaction enters clearing and settlement—the stage where money actually moves. The issuer releases the funds to the card network, which passes them on to the acquirer. The acquirer then deposits the amount into the merchant’s account, subtracting fees such as interchange or processing costs.

Depending on the acquirer’s policies, settlement can happen the same day or take several days to complete.

Key differences between issuers and acquirers

Both sides are indispensable, but their perspectives are opposite: issuers protect the consumer while acquirers enable the merchant.

Related players in the payment process

Merchant account

A merchant account is a special type of account provided by an acquiring bank. Card payments are first deposited here before being transferred to the merchant’s standard business bank account. Without it, a business can’t accept card payments directly.

Payment gateway

The payment gateway is the secure entry point of every online or card-not-present transaction. It captures the customer’s card details, encrypts them, and passes the information safely into the payment system.

Payment processor

A payment processor moves data between the merchant, the acquirer, the card network, and the issuer, making sure each step — from authorisation to settlement — is completed properly.

Why some providers combine roles

To simplify operations, many providers combine the gateway, processor, and acquirer into a single platform. For merchants, this means fewer contracts, unified reporting, and faster settlement. Antom, for instance, offers an integrated solution that supports global payments without the complexity of dealing with multiple intermediaries.

Additional considerations in the issuer–acquirer relationship

Licensing, certification, and compliance

Both issuers and acquirers operate under strict oversight from card schemes and regulators. To stay compliant, they must meet standards such as PCI DSS for secure handling of cardholder data, adopt tools like 3D Secure (3DS) for stronger authentication, and follow local laws — for example, PSD2 and the upcoming PSD3 in Europe.

Risk management responsibilities

The two banks face different sides of risk. Issuers are exposed to fraud or non-payment by cardholders, while acquirers deal with merchant-related issues such as chargebacks or disputes over settlement. Together, their cooperation helps maintain trust in the card payment system.

Fee structures

Every card payment comes with costs that are shared across the ecosystem:

• Interchange fees: paid by the acquirer to the issuer for each transaction.
• Acquirer markups: additional processing fees merchants pay for the acquirer’s services.
• Settlement timing: policies vary by acquirer, determining how quickly merchants receive their funds.

Understanding these elements is essential for both merchants and financial institutions, as fees and risk-sharing shape the economics of card payments.

Why issuers and acquirers matter for merchants

Optimising acceptance rates

Local acquiring banks play an important role in reducing card declines. When an acquirer is licensed in the merchant’s target market, issuers are more likely to approve the transaction.

Managing costs and fees

The choice of acquirer directly impacts transaction costs. Working with a merchant acquirer that offers transparent pricing helps merchants control margins.

Ensuring faster settlement and cash flow

Settlement timelines affect working capital. Acquirers that provide flexible settlement schedules support merchants’ cash flow needs.

How Antom supports merchants globally

Antom is a global acquirer with strong local coverage and regulatory expertise. By combining gateway, processing, and acquiring services in a single platform, it reduces complexity and gives merchants a clear view of their payment operations.

Key advantages include:

• Global reach: local licences in major markets help reduce declines and raise authorisation rates.
• Multi-currency support: accept and settle in more than 100 currencies.
• Settlement flexibility: options that let businesses align cash flow with their needs.
• Risk and revenue tools: fraud prevention through Antom Shield and recovery features such as Revenue Booster.

For merchants aiming to scale internationally, issuers and acquirers are only part of the picture. The right acquiring partner provides the infrastructure and support needed to process payments reliably, protect revenue, and grow across borders.