What is acquiring in simple words: types, how it works, pros and cons

What is acquiring

The meaning originates from the English acquire - to acquire.
This is a service provided by the bank, thanks to which your client can pay for the purchase of goods or services by bank transfer, that is, with a bank card through the terminal.

Main features of acquiring:

• Today, the share of payments by bank transfer exceeds the share of cash payments. Therefore, acquiring is important for a trading type of business.
• The widespread use of bank cards for payments has made it possible to achieve a great level of convenience. The customer is not required to carry cash and the seller does not have to worry about change.
• The commission for using acquiring services is taken only from the entrepreneur. His clients don't pay for it. And the percentage of commission from business is not high. Up to 2.5 percent.

Participants in the acquiring transaction

Business (sale) – an entrepreneur or company that sells goods or services.

The acquiring bank is the supplier of equipment for carrying out acquiring operations, charges a commission, and is also responsible for the technical execution of the operation. In order to be able to provide services to businesses, such an organization must be registered with one or more international payment systems. As a standard, these are the well-known Visa, MS, and also, more recently, Mir.

The issuing bank is the organization that issues cards. In the case of the issuing bank, responsibility extends to the correctness of payments to the cardholder.

Client is a person who owns a bank card and makes non-cash payments using it.

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Acquiring concept

Translating the word from English will help you understand what acquiring is. The literal meaning of the word is translated as “acquisition.” This term is common in the banking sector when defining the system of accepting special cards for payment. In practice, acquiring provides the opportunity to make purchases and pay for services without using cash.

Implementation history

The rapid replacement of “paper” money with non-cash amounts showed how in demand and convenient this function is. Modern life is no longer possible without bank plastic. You can get an idea of ​​acquiring and what it is in simple words using the example of common non-cash transactions. Just recently, people lined up at the cash desks to pay for housing and communal services, but now it is enough to insert the plastic card into the terminal and carry out the necessary expense transactions, and upon completion of the procedure, receive a check that replaces the payment receipt.

However, like any other invention, in the early stages acquiring was quite simple and had a limited set of functions. Many entrepreneurs were just thinking about acquiring, and what it was was known only to the most advanced companies.

The beginning of accepting cards for payment is associated with the removal of the so-called slip, i.e. a paper slip with details. At first, the use of such a system was unsafe - the lack of communication with the bank did not allow checking whether there was a sufficient amount in the client’s account. If the purchase was expensive, the teller could call the bank to make sure that the client had the required amount. The emergence of special electronic devices that establish communication with the bank has increased security and simplified the work of making payments.

Modern Application

Acquiring is a bank service that provides comprehensive services to an organization for payments using payment cards. Full service includes technological, calculation and information support.

The use of an acquiring system involves work on preliminary preparation and further servicing of payments. First of all, the organization enters into an agreement with a financial structure offering acquiring services. Within the framework of this cooperation, the acquirer is a bank that owns payment terminals, which are installed in stores and other payment points (restaurants, gas stations, cafes, etc.). If it is necessary to ensure a connection between card acceptance and cash registers, PIN pads are installed at points of sale.

Working principle in practice

The plastic product issued by the bank represents the key to the payer's account. One of the signs of a competitive financial organization is the emission of plastic. Thanks to the connection to international payment systems, it has become possible to accept cards in other countries of the world if the issuer is a participant in this system. You can find out which system the customer card belongs to by the logo printed on the front side of the plastic. The most well-known payment systems in Russia are Visa and MasterCard. Recently, the use of its own payment system called “Mir” has been actively introduced.

Each organization engaged in trade or providing services, connecting to acquiring services, takes measures to install special equipment and organize its operation through payment system participants. As a result of close cooperation with acquiring banks, the process of cashless purchases in stores has become simple and safe.

Features of acquirer services

To ensure stable operation, the organization signs a special acquiring agreement. According to the provisions of the agreement, the acquiring bank installs POS terminals and provides software support.

The list of bank obligations includes:

• provision of technological equipment (free installation, rent, right of purchase);
• setting up work on accepting bank plastic for accepting payments;
• work on training cashiers to accept and service card transactions;
• provision of consumables;
• routine maintenance;
• Information support.

For its part, the organization must also fulfill its obligations to the bank.

Types of acquiring

There are several main types of acquiring, as well as ATM acquiring

Trade acquiring

This concept includes all equipment located in physical retail outlets, from shops to cinemas, gas stations and cafes.

This is the very first type of non-cash payment to appear on the market. Using such a device, the required amount of money is debited from the client’s card. After which they are transferred to the account of the seller of the product or service through whose terminal the debit was made.

The amount of funds is credited to the seller’s account minus the commission percentage.

Internet acquiring

This type of acquiring has recently become popular in Russia. It developed along with the rapid growth of the online trading industry. This type includes all types of purchases via the Internet, when payment is made through a bank card or payment services.

In this case, the seller does not need the terminal. It is being replaced by the bank's electronic service and a special online program that will ensure data confidentiality and security of the money transfer.

The commission in the case of Internet acquiring can even exceed five percent.

Mobile acquiring

Essentially, this is the use of the same POS terminals as for trade acquiring, only in this case their mobile version is provided. That is, such terminals are not physically tied to one point, but can be transferred.

Mobile acquiring is necessary for certain types of businesses that require the ability to pay locally. For example – taxis, couriers, outbound trade and others.

Such acquiring is called mobile not only and not so much because the terminals can be moved, but because they are controlled using a smartphone with a special application installed on it in advance.

The commission for such acquiring may be even higher than in the case of Internet acquiring. And it is provided by such services as Pay Me, ibox, SimplePay and a number of others.

ATM acquiring

This type of acquiring is also common, but is not required for most types of business, but is independent. These are all possible terminals and ATMs that allow you to pay for services through them.

Disadvantages of acquiring

The disadvantages of non-cash payments include:

1. Performance. There is always room for technical failures in the operation of programs and equipment. This may cause some inconvenience. But banks respond promptly to requests and try to resolve problems as quickly as possible.
2. Safety. Each participant in the non-cash payment system runs the risk of becoming a victim of fraudulent activities. But thanks to modern security mechanisms and knowledge of the basic rules for using cards, such a risk is minimized. After all, paying in cash also cannot guarantee absolute security.
3. Skill. Salespeople need to be trained to operate the devices.

We recommend reading: Rating of banks with free cash settlement services and current accounts for individual entrepreneurs and LLCs.

Type of acquiring terminals

Both its cost and its capabilities depend on the type of equipment.

POS terminals

The most common options. Models of such equipment are presented on the market by several major companies. They are mostly equipped as standard, but there is also the possibility of additionally equipping them with a remote keyboard for entering a PIN code, so that only this is available to the buyer, and the terminal itself with the receipt printing unit is located at the seller.

Imprinters

Almost obsolete types that preceded standard POS terminals. Authorization takes place over the phone. Such terminals are now found only as a safety net in case of loss of connection to the Internet at ordinary terminals.

Cash registers equipped with acquiring function

Today they are becoming the main type of terminals due to the fact that since the summer of 2020, at the legislative level, an obligation was introduced for all retail outlets to use terminals for instant online sending of checks to the tax office. Such devices are not only necessary, but also automate the process, simplifying the seller’s activities and interaction with the regulatory authority.

Variety of terminals according to the type of connection with the bank

Communication options affect its stability and performance. Naturally, the most convenient is a wi-fi connection. However, this requires that a separate retail outlet be equipped with an Internet connection through a regular provider.

The 3G network allows you to use terminals in points where there is no separate Internet connection through a provider, but this option is much slower.

Other types of communication, such as Ethernet and GPRS, are no longer used.

Options for payment systems with which the bank cooperates

The main ones are Visa and MasterCard. However, the wider the list of these systems, the more card options the terminal can handle. Since 2014, most banks have supported the national payment system “MIR”.

Agreement on the provision of acquiring services

The document reflects all options for interaction between the bank and a company or entrepreneur, including terms of enrollment, use cases, technical support, and so on.

The addition to the acquiring agreement is also important, since it must contain a description of the equipment.

Responsibilities of the bank during acquiring

• Stability of equipment operation.
• Employee training.
• Timely transfer of money.
• Service maintenance.

Responsibilities of a retail outlet equipped with an acquiring terminal

• It is required to ensure the safe use of terminals.
• Obligation to accept bank cards.
• Obliges to pay the bank a commission for using the terminal.

How much does acquiring cost?

Payment for purchases using a bank card is free for the customer of the outlet. But the seller pays a commission for it. For each transaction, the acquirer takes on average 2-3% of the purchase price. What are these numbers made up of?

According to the agreement concluded between the seller and the acquiring bank, the commission for a purchase using a card has three components:

1Commission of the bank that issued the card (the so-called “interchange fee” - Interchange Fee).

Its size is determined by payment systems and depends on the location of the acquiring banks. If both are located in the same country, the commission will be less than if the issuing bank is Russian and the acquirer, say, European. The percentage also depends on how secure the payment is. If an additional security protocol is used (for example, 3D Secure), the commission will be lower. When purchasing online, the commission is higher than when paying by card through a POS terminal.

It also depends on the type of store. Grocery outlets have lower commissions than, for example, those selling large household appliances. The reason is the likelihood of returning the goods and, as a consequence, the need to carry out a “reverse” acquiring operation - return the money to the buyer’s card. If this is a rarity in the case of products, then a returned top-end 120-centimeter TV leads to the need to send back a fairly large amount.

The size of the commission is also affected by the type of client’s card. The higher the status of the payment instrument, the more expensive the purchase is - however, for the acquirer, and not for the buyer. The most expensive are gold cards and cards with personal conditions. Credit cards have higher fees than debit cards. In particular, the strategy of Tinkof Bank is built on this: the line of credit cards is actively developing, and even standard ones have Platinum status.

And, of course, the commission percentage depends on the company’s turnover. Basic figures are specified in the contract and then adjusted in case of deviation from the initially assumed values.

2Commission of the acquiring bank.

Appointed by the bank itself, it can be anyone. Due to this component, credit institutions usually carry out various promotions to attract legal and individual clients. Below you will find a comparison table with commissions and other payments of the 10 most popular banks providing acquiring services.

3Payment system commission.

The share of this component is small; international payment systems live off volumes. The commission is fixed, depends on the number of transactions per unit of time (for example, per month), and can be charged both from the acquirer and the issuer.

Stages of choosing a bank for acquiring

• Find out what equipment options the bank offers, what the cost of the terminal is, what its functionality is.
• Read and study the acquiring agreement.
• Find out what percentage the bank takes from each non-cash payment

Important! For each payment made through the terminal, the bank will take a certain percentage, which is specified in the agreement. In the case of merchant acquiring, it varies from bank to bank and can reach 2.5%.

And if some banks provide POS terminals for their clients free of charge, then everyone takes a commission for use. When choosing a bank, it is important to understand exactly what commission conditions the organization offers you.

• Find out which payment systems are supported.
• Highlight your rights and obligations under the contract.
• Study the tariffs offered by the bank for settlement and cash services. This is an important factor, since some banks do not allow you to use terminals without opening a current account, which can complicate the task and increase acquiring costs in general.

Advantages of acquiring

Acquiring simplifies doing business for an enterprise due to its undeniable advantages:

1. Save time. Cashless payments are faster.
2. Reducing cash risks. The seller does not need to count cash and check banknotes for authenticity.
3. Reducing collection costs.
4. Increase in revenue. It has been proven that it is psychologically easier for people to part with money if they pay by card.
5. Attraction of new clients. Fewer and fewer people use cash.
6. Expansion of geography. Thanks to Internet acquiring, you can accept payments from anywhere in the world.

How to connect acquiring

• Contact the bank and request advice on acquiring services. Find out all the information.
• Fill out an application in the bank's form to connect acquiring.
• Conclude an agreement with a banking organization.
• Provide the documents requested by the bank
• Start working and accept cashless payments.

Necessary documents for concluding an acquiring agreement

• Passport of a company representative, or passport of an individual entrepreneur
• State registration document
• Document from the tax office
• Document with details
• A card containing sample signatures and a seal impression.
• The bank may request additional documents - balance sheet, licenses and patents, photo of the point of sale where the terminal will be installed, etc.

Accounting entries for acquiring transactions

Accounting for acquiring in accounting is displayed by the following transactions:

• Dt 62 “Buyers and customers” - Kt 90-1 “Revenue” - display of receivables from customers for goods sold, payment for which was made by bank cards;
• Dt 57 “Transfers on the way” - Kt 62 “Buyers and customers” - transfer to the bank of documents for the amount of payments for goods with bank cards;
• Dt 51 “Current account” - Kt 57 “Transfers in transit” - crediting to the current account of funds for goods sold (minus the commission of the acquiring bank);
• Dt 91 “Other income and expenses” - Kt 57 “Transfers in transit” - write-off of the acquiring bank’s commission for the acquiring services provided.

To automate the accounting of acquiring operations, POS terminals are integrated with 1C software products.

What to do if you want to open an account in one bank, but want to open acquiring in another?

If you have a merchant acquiring option, then most banks today do not see any problem in the fact that the account is opened in one organization, and the terminal is provided by another. However, you need to understand that for a transfer to another bank there will be either a separate or increased commission.

If you have Internet acquiring, then you can use it without opening a current account at all. In this case, the funds will be transferred to your personal account. Another thing is that this is not profitable for banks, so they prefer not to provide such services at all. Special services may be a solution. For example, Evotor, or Uniteller. Such services act as intermediaries between you and the bank, concluding agreements themselves.

List of documents

The package of documents required to complete acquiring will depend on where the current account of the individual entrepreneur (LLC) is opened. If acquiring is issued in the bank where you have an open account, it is enough to apply with a passport and a document of title to the retail outlet (at the bank’s request).

If you do not have an invoice, in addition to the above documents, prepare:

• registration certificates;
• constituent documents (for LLC);
• licenses;
• current account details;
• sample signature card.

Please check the list of documentation in advance; it may differ from bank to bank.

What is more profitable - buying a terminal for acquiring, or renting it?

The entrepreneur must decide this question for himself. Because everything will depend on the specific situation, capabilities and conditions of the bank. For example, some banks offer installation of terminals free of charge for cash settlement services. On the other hand, the commission for using a bank terminal may be higher than using your own. But your own costs several times more, which may not be suitable for a novice entrepreneur, and the bank may impose restrictions on the amount of monthly use.

To answer the question you need to know the specific conditions.

Do I need to issue checks when using online acquiring?

This is now required by law. Everything is specifically spelled out in Law No. FZ-54. Another thing is that when paying online by card, the supporting document will be an electronic receipt. It is this that can be taken into account as a supporting document at the time of preparing accounts or tax reporting, and can also be the basis for a refund. Such a receipt is usually sent to the email address that the client must fill out upon purchase.

Commission of the bank

The bank charges a fee for acquiring services - this is a commission for each purchase. The percentage for transactions may depend on several factors:

• type of activity;
• monthly turnover;
• number of terminals.

If monthly turnover is low, the bank may also set a subscription fee. In addition, the amount of the commission will differ for different types of acquiring; for example, Internet acquiring will cost more.

You can rent equipment for work or purchase it from a bank. The cost varies greatly depending on the characteristics of the terminals and their number. Some banks rent devices for free.