Issuer vs. Acquirer: A Bank Comparison

Issuer vs. Acquirer: A Bank Comparison

By In Information On July 17, 2015

Two major banks involved in the chargeback process

Chargeback terminology may seem confusing at first, but there are a several key terms that every merchant must know to understand the chargeback process. The issuing bank (issuer) and acquiring bank (acquirer) are involved every single time a transaction takes place. As merchants, understanding their importance is vital to the success of your business.

Who Is the Issuer?

The issuing banks, also known as credit card companies, issue credit and debit cards to cardholders. Issuers are representatives of the cardholder during the transaction process, acting as the link between the cardholder and the rest of the payment processing players.

For credit card holders, the issuing bank is the financial institution to which the cardholder pays his or her credit card bill. For debit and check card holders, the issuing bank provides a checking or savings account.

Examples of issuing banks include Bank of America, Wachovia, and USA Federal Credit Union.

Who Is the Acquirer?

The acquirer is involved in the process on the merchant’s behalf. Acquiring banks enable merchants to process credit and debit card payments by providing them a merchant account.

When a customer wants to use a payment card to make a purchase from the merchant, the acquirer passes the transaction information along to the cardholder’s issuer to receive payment. The acquirer then deposits the cardholder’s funds in the merchant’s account.

Examples of acquiring banks include First Data, Chase Merchant Services, and Paymentech.

There are Exceptions

There are exceptions to many standard practices when it comes to payment processing.

Occasionally, some financial institutions will act as both the issuing bank and the acquiring bank. Examples of these include Wells Fargo, Fifth Thirds Bank, and Suntrust.

In addition, card networks such as Visa and MasterCard enable issuing banks to be their link to the cardholders for their branded credit and debit cards. However, networks such as Discover and American Express act as both the issuing bank and the card network for their branded cards.


Issuers and acquirers are not only involved in the processing of a transaction, but they are equally as involved in the dispute of one.

Although representing opposite parties, every time a chargeback is filed, the issuer and acquirer must work together to reach an efficient and appropriate conclusion.

When a cardholder intends to file a transaction dispute against a merchant, he or she will contact the issuing bank to begin the process. The issuer confirms the cardholder has a valid reason for requesting a chargeback and then sends this information to the acquirer.

Sometimes, if the transaction is suspicious or not authorized, the chargeback process begins with the issuer, without notification from the cardholder.

The acquirer then reviews the case. If the bank has the evidence to refute the chargeback, it sends it back to the issuer. If it does not already have the proof needed to re-present the chargeback, the acquiring bank then sends the case to the merchant to either prepare a case or accept the chargeback.

If the merchant believes that the chargeback is unwarranted, it will send the evidence back to the acquirer, who will then forward the information to the issuer for review. Once the case has been reviewed, the verdict is decided in favor of the merchant or cardholder, and the information is communicated via the acquirer and issuer.

Let Us Help

When it comes to chargebacks, learning the basics is crucial to winning any disputes. However, understanding payment processing isn’t always easy. That’s where we come in.

Dispute Chargebacks handles the entire chargeback process, from alerting you of possible threats to recouping your money through individualized case representments. We dedicate our time to fighting your chargebacks so that you can dedicate your time to making the sales.

Contact us today to find out just how much money you could be saving by winning your chargeback disputes.