Finding your perfect Acquirer: A comprehensive guide

In today’s global economy, choosing the right acquirer for cross-border payments is crucial for businesses aiming to expand internationally. The complexity of managing different currencies, regulatory requirements, and local payment preferences makes this a critical decision. This guide will help you navigate the complexities of selecting the right acquirer for cross-border payments by providing a clear understanding of what an acquirer is, the different types, and how to choose the best one for your needs.

What is an Acquirer?

An acquirer, also known as an acquiring bank, is a financial institution that processes various types of payments on behalf of a merchant. This includes transmitting the payment request to the appropriate payment network, whether it be a card network (e.g., Visa, Mastercard), BNPL (Buy Now, Pay Later) services, e-wallets, or account-to-account (A2A) transfers. The acquirer ensures that the funds are transferred from the issuing bank or payment service provider to the merchant’s account.

The global market for payment processing solutions is expected to reach $120.7 billion by 2025, reflecting the critical role of acquirers in facilitating transactions.​

Types of Acquirers

Understanding the different types of acquirers is essential to selecting the best one for your business needs. Here are the main types:

Local Acquirers

Local acquirers operate within specific countries or regions, providing higher authorization rates due to their familiarity with local banks and regulations. They are particularly effective for businesses targeting specific markets.

Examples:

1. BNP Paribas (France): A leading bank in France offering comprehensive acquiring services for local businesses.
2. ICICI Bank (India): One of India’s largest banks, offering robust payment processing solutions for domestic transactions.
3. Westpac (Australia): A major Australian bank that supports local merchants with tailored payment solutions.
4. Standard Bank (South Africa): Provides acquiring services that cater specifically to the South African market.

Cross-Border Acquirers

Cross-border acquirers facilitate international transactions, offering services that span multiple countries and currencies. They are ideal for businesses with a global customer base.

Examples:

1. Adyen (Global): A global payment company that supports international transactions across multiple regions.
2. Fiserv (Global): Provides a comprehensive suite of cross-border payment solutions with extensive global reach.
3. TSYS (Global): Known for offering secure and reliable payment processing solutions across various regions.
4. Worldpay (Global): Provides robust cross-border payment solutions with a focus on security and compliance.

Hybrid Acquirers

Hybrid acquirers combine features of both local and cross-border acquirers, offering localized services in multiple regions. They are suitable for businesses that need both local presence and global reach.

Examples:

1. J.P. Morgan (Global): Offers tailored payment solutions that cater to both local and international markets.
2. Citi (Global): Provides comprehensive acquiring services with a strong focus on compliance and security.
3. Airwallex (Global): A fintech company offering efficient cross-border payment solutions with local acquiring capabilities.
4. TrustPay (Global): Specializes in offering flexible payment solutions that cater to both local and international transactions, with a strong emphasis on security and compliance.

The importance of choosing the right Acquirer for cross-border payments

Selecting the right acquirer is crucial, especially for businesses operating in or expanding to specific countries. The right acquirer can help navigate complex regulatory environments, manage currency conversions, and prevent fraud. For example, cross-border e-commerce accounted for 22% of all e-commerce transactions in 2022, highlighting the growing importance of international payment solutions. Here are the key factors to consider:

Key factors in choosing an Acquirer for cross-border payments

Geographic coverage:

Ensure the acquirer can support your current markets and future expansions. This includes:

• Licenses and Partnerships: The acquirer should have the necessary licenses to operate in your target countries. This includes being compliant with local regulatory requirements, which vary significantly across regions. For instance, the European market requires GDPR compliance, while in the United States, the Payment Card Industry Data Security Standard (PCI DSS) is crucial.
• Local Acquiring Capabilities: It’s essential that the acquirer has established partnerships with local banks and financial institutions. This not only ensures higher authorization rates but also better handling of local currencies and payment methods.
• Global Presence: The acquirer should be able to handle payments across multiple regions, facilitating smooth and efficient cross-border transactions. This is particularly important for businesses looking to expand into new international markets.

Breadth of capabilities:

Look for comprehensive services including:

• Fraud management: The acquirer should offer robust fraud detection and prevention mechanisms to protect against various types of fraud. This includes real-time monitoring and advanced analytics to detect and mitigate fraudulent activities.
• Optimized settlement times: Efficient settlement processes are crucial for maintaining cash flow and operational efficiency. The acquirer should offer fast and reliable settlement times to ensure funds are available in your account as quickly as possible.
• Detailed analytics: Access to detailed transaction data and analytics is essential for understanding payment trends, managing performance, and making informed business decisions. This includes comprehensive reporting tools that allow you to track and analyze transaction data.
• Multiple payment methods: The acquirer should support a wide range of payment methods to cater to different customer preferences. This includes traditional credit and debit cards, e-wallets (e.g., PayPal, Apple Pay), Buy Now Pay Later (BNPL) services, and account-to-account (A2A) transfers. The ability to handle these diverse payment methods ensures that customers can pay using their preferred options, enhancing their overall experience.

Ease of integration:

Evaluate the acquirer’s API support and integration ease with your existing systems. Seamless integration reduces operational complexity and enhances the overall payment experience. It’s important to note that over 80% of global card acquiring volume is still processed by archaic, monolithic infrastructures. This highlights the need for modern, flexible solutions that can adapt to evolving business requirements. For more insights on this topic, you can refer to Build or Buy a Payment Infrastructure​.

Cost and settlement efficiency:

Understand the pricing model, transaction fees, and settlement speed. Efficient settlement processes ensure that funds are quickly available in your account, improving cash flow and operational efficiency. Generally, using local acquirers can be more cost-effective than global ones due to lower transaction fees and better local currency handling. Local acquirers often have more favorable terms and lower costs for domestic transactions compared to international ones handled by global acquirers​.

Compliance and security:

Different countries have unique regulations affecting payment processing. For example:

• • Global: The Payment Card Industry Data Security Standard (PCI DSS) mandates robust security protocols for handling card payments worldwide.
  • Europe: General Data Protection Regulation (GDPR) requires stringent data protection measures.
  • Asia: Singapore’s Payment Services Act imposes specific requirements on payment service providers. Ensure the acquirer has a robust compliance framework and security protocols to manage these varying requirements.
  • Brazil: The General Data Protection Law (LGPD) sets strict guidelines for data protection and privacy similar to GDPR.
  • Canada: The Personal Information Protection and Electronic Documents Act (PIPEDA) governs how private sector organizations collect, use, and disclose personal information in the course of commercial business.

Selecting an acquirer that excels in these key factors will help streamline your payment processes, enhance customer satisfaction, and support your business’s growth in international markets.

The importance of orchestration services

When managing multiple acquirers, an orchestration service becomes vital for several reasons:

• Unified View: Provides a single dashboard to monitor all transactions, simplifying management and oversight.
• Compatibility: Ensures that different acquirers’ systems and processes work together seamlessly.
• File Management: Automates the handling of different file formats and processes, reducing manual effort and errors.
• Reconciliation: Streamlines the reconciliation process, making it easier to match payments with invoices and manage discrepancies.
• Analytics: Offers comprehensive data analytics and reporting tools to track performance, identify trends, and make informed decisions.
• Exports: Facilitates easy export of transaction data for further analysis or compliance reporting.

Using an orchestration service can streamline operations, enhance transparency, and improve overall efficiency. Businesses using orchestration services report up to a 30% increase in operational efficiency due to streamlined payment processes.

Conclusion

Choosing the right acquirer involves evaluating their geographic reach, capabilities, integration ease, cost efficiency, compliance, security, and support infrastructure. By leveraging these considerations and incorporating orchestration services, businesses can optimize their cross-border payment processes, enhance customer satisfaction, and drive international growth.

About NORBr

NORBr offers a cutting-edge payment infrastructure that empowers PayFacs, ISOs, ISVs, and large retailers to streamline their cross-border payment processes. Our comprehensive platform integrates seamlessly with multiple acquirers, providing advanced orchestration, compliance, and settlement capabilities. By utilizing NORBr, businesses can reduce operational complexities, improve transaction efficiency, and achieve faster market deployment, ensuring they stay competitive in a rapidly evolving global market.