Choosing the Best Acquiring Bank for your Business in Europe 2022

If you are a business taking online payments, you must have heard about the term ‘acquiring bank’ or ‘acquirer’. But ever wondered what it means? Or why do you need to work with one, or multiple acquirers, for that matter? Let’s break it down for you. Acquiring banks, or acquirers process payments for merchants in return for a fee. They also offer you your merchant account. Every time a customer makes a payment on your website or app, the acquirer initiates a request to pull money from the customer’s bank account. This request goes to the issuer (the cardholder’s bank) via the card network (e.g., Visa, Amex, etc.). Once the payment is authorized, the acquirer pulls the funds from the cardholder’s account and places them in yours. Acquirers are licensed by financial regulatory bodies and are compliant with all local laws and regulations. In short, an acquirer is essential for your business.

Acquiring Bank – Single acquirer vs Multi-acquirer?

As a merchant, you can work with a single acquirer or many. It depends on what your business needs are. Here’s a quick idea:
Single acquirer: this is when you work with one bank in your local region, and they process all your payments.
Pros:

• Less complex – one contract, one point of contact.
• Easy to reconcile payments and easy to integrate into your business systems.
• It also means faster time to market, and it works well within a smaller region.

Cons:

• Not the best option if you operate in multiple markets, especially overseas ones.
• Lower conversion rates, higher dependency on one acquirer could threaten your business continuity during downtime.

Multi-acquirer: this is when you work with more than one acquirer, depending on the markets you are active.

Pros:

• Improves your conversion rates and gives you more control over processes.
• Spreads out your risk. If one acquirer faces outages, you can switch to another without disrupting your business.
• Allows smart payment routing – that means a transaction is automatically routed to the acquiring bank that is most likely to approve it. This boosts your conversion rate.
• Room for more localization – you can support more local payment methods so that customers have more options to choose from.

Cons:

• Expensive
• Complex processes – multiple contracts and regulations.
• Reconciling payments becomes complicated, especially with data coming from different acquirers.

How can merchants choose what is best for them?

To decide what works best for you, you need to assess the needs of your business – your short-term vs. long-term goals. Do you have the budgets? Are you willing to work with the complexity? Answering these questions can help you identify what works best for you and your business. It is also crucial to choose the right payments partner. A good option is to partner with acquirer-agnostic payment gateways or a payment service provider (PSP) that works with multiple acquirers. They can help you reap the benefits of multi-acquirer relationships, but without the cost or complexity attached to them.

For example, an acquirer-agnostic PSP like Novalnet connects with multiple acquirers on your behalf so that you are free to focus on your business. We perform smart payment routing so that your payments don’t fail and conversion rates don’t dip. You can use our smart reconciliation tools to resolve payments easily. And our instant plug-ins allow fast integration to reduce your time to market. Working with an acquirer-agnostic PSP helps you to remain agile and avoid delays and ensure your payments are running smoothly, round the clock.

How can Novalnet Help?

Novalnet works with multiple acquirers across Europe in local territories. This helps you get the benefits of multi-acquirer relationships but with the ease, flexibility, convenience, and costs of a local supplier. We serve as your singular point of contact for all things payments – so that you can focus on your business and leave the rest to us. As a global payment service provider, we have extensive experience in helping Europe’s leading brands to process payments. Our technology helps you to accept payments globally in 125+ currencies in 150+ automated country-specific payment methods. You can set up your payments within minutes with minimal coding using our instant payment plug-ins. Our AI-based risk management solutions and advanced analytics help you design the best payment experiences for your customers, all in a fully secure environment.
Reach out to us today to know more.

Jose Augustine

Jose Augustine is the Chief Business Development Officer at Novalnet with extensive experience in European payment industry and a knowledge powerhouse.