The acquiring market is a segment of the financial world that deals with the intermediation of payments between customers and companies in any segment.
Many may confuse it with credit card brands or card issuers themselves (usually banks), but acquiring companies deal with other processes that are also fundamental in the commercial world.
Understanding the acquiring market is important, especially for new businesses that are studying the possibility of paying and receiving payments for their products and services.
If you are planning to set up an e-commerce or physical store, for example, understanding what acquiring is, payment gateways and what are the best financial solutions to offer your audience is essential.
After all, a good payment experience is crucial for a customer to close a deal with a brand or for it to be finalized in the medium and long term.
Poor security at checkout and a lack of safe and interesting options for making the transaction can make you instantly give up on closing deals.
According to True Layer, 87% of consumers have experienced frustration with payments . In addition, 56% of companies reported a drop in conversion rates due to complex payment processes .
What is the acquiring market?
First of all, it is important to emphasize that the payment acquiring service is much older than you might think. It practically emerged simultaneously with credit cards during the 1940s in the United States, according to The Sharmas.
Since then, this market has evolved as the consumer market has grown and become more complex, just as payment solutions have become more modern.
And the power of this segment can be measured in numbers: around US$40 trillion is generated by the acquiring market every year , according to Research and Markets, and the sector is expected to grow by 7.68% annually until 2028 , according to Globe Newswire.
The main role of an acquiring company is to mediate commercial transactions between customers and companies using the instrument used by the customer, mainly credit and debit cards.
However, with the modernization of this sector and the growing digital transformation , new payment solutions, such as Pix, can also be intermediated by acquirers.
The main role of the acquirer (an English term that identifies companies in the sector) is to promote the processing and security of commercial financial transactions, ensuring that they follow all the integrity rites and protocols provided for by the Central Bank.
This business model is essential to provide the payment infrastructure needed for small and large businesses to transact safely and effectively.
Therefore, you, as an entrepreneur, who wants to open your own business, need to be aware of which companies offer the best solution for your business, such as more attractive rates and complementary services.
How does the acquiring service work?
But what is the acquiring market in practice? How do they work to provide a payment structure between customers and companies? Let us explain!
When a customer makes an online purchase on credit or in person using a card machine, it is the acquiring company’s role to communicate with the card brand (Elo, Visa, MasterCard, among others) regarding the payment request.
The card issuer then notifies the bank so that the institution can confirm the amounts or find any inconsistencies that prevent the transaction from being confirmed. These inconsistencies may be related to:
- suspicious value much higher than the consumer’s usual value;
- incorrect password entry;
- lack of limit on the card.
After reading and confirming payment, the purchaser automatically generates proof of payment, which can be printed or sent digitally by email or SMS.
Despite confirmation from other intermediary institutions, it is worth noting that the acquirer is not responsible for more complex security measures, such as data encryption for digital purchases and customization of charges.
This work is usually done by a sub-acquirer company . It acts as an intermediary between a business and the acquirer, facilitating companies’ access to modern payment solutions without the high investment and regulatory obligations that an acquirer demands.
Therefore, the acquiring market deals directly with the major card brands and banks, which gives it a more comprehensive role in the process.
In turn, famous payment gateways operate in the financial market to connect merchants to large acquirers, in addition to offering all the technological support necessary to optimize the payment service of these companies.
Future of the acquiring market
The biggest challenge for the acquiring market today and in the coming years is knowing how to adapt the technological innovations of digital transformation to expand its services to different payment methods and improve the end customer experience.
In addition, it also needs to deal with the significant inclusion of new consumers in banking services, such as current accounts and credit cards.
This, after all, is a direct reflection of the growth of startups and the greater opening of the financial market through mobile applications.
