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Merchant acquiring is the process by which a merchant accepts payments from customers. A merchant acquirer is a financial institution providing businesses with credit and debit card processing services. Merchant acquirers are banks, large financial institutions or commercial organisations that specialise in providing these services. Merchant acquirers usually have relationships with the major credit card networks (e.g., Visa, Mastercard, American Express) and can allow businesses to accept credit and debit card payments.

With cashless transactions becoming increasingly popular, it is essential to partner with a merchant acquirer that will make credit and debit card payments straightforward and safe. Whether you’re a business owner seeking an understanding of the ins and outs of your payment system or simply curious about the behind-the-scenes workings of commerce, this blog post will break down what merchant acquiring is and how it works. 

Global merchant acquiring market

Research findings released by Absolute Reports indicate that The global Merchant Acquiring Market is set for remarkable expansion in the upcoming years, with increasing demand for various types (E-commerce, M-commerce) and applications (Government, Commercial, Others).

The report estimates that the market size was valued at USD 20311.51 million in 2022 and suggests that the market will expand at a CAGR of 7.68% during the forecast period, reaching USD 31659.3 million by 2028.

The global merchant-acquiring market is growing due to several factors, including the increasing population, rapid urbanization, and rising disposable income. Changing consumer preferences also contribute to the market’s growth, as more consumers opt for online and global purchasing options. Furthermore, technological advancements drive the market by introducing new payment technologies, such as mobile and contactless payments.

Merchant acquisition landscape in Africa

A study by fintech giant BPC showed that 57% of Africans need bank or mobile money account access. Despite some positive progress, a notable portion of the Sub-Saharan African population still needs access to banking services.

However, the latest data from the World Bank indicate that the region has the opportunity to use its resources and people to create inclusive growth. The world’s most significant free trade area and a 1.2 billion-person market are taking shape, offering immense potential for a new development approach on the continent. 

According to McKinsey, consumer payments in Africa will reach $2.1 trillion by 2025. The data indicate that e-commerce and m-commerce have the potential to outpace traditional retail forms. Additionally, the study implies that by 2025, e-commerce could represent 10% of all retail sales within Africa’s largest economies. African MSMEs are around 100 million, with Nigeria alone accounting for over 40 million. Therefore, the African consumer sector is on an upward trajectory and will likely offer ample opportunities in the merchant acquisition market.

An image of the earth showing the map of Africa and the potential of merchant acquiring

Emerging trends in merchant acquiring

Merchant acquiring is an ever-changing landscape, and new trends are constantly emerging. Keeping on top of these trends is essential for any business that wants to stay ahead of the competition. Here are some of the most recent trends in merchant acquiring:

  1. Alternative Payments: Consumers increasingly turn to alternatives like mobile wallets and peer-to-peer payments as they become more reliant on mobile devices and less willing to carry cash. This presents a significant opportunity for acquirers, who can allow merchants to accept these popular payment methods.
  2. Contactless Payments: There is a growing trend towards contactless payment methods such as “tap-to-pay cards”. These give consumers more choice and flexibility when making payments, driving merchant acceptance of these new technologies.
  3. Merchant financing: As merchant acquirers seek to differentiate themselves from competitors, offering merchant financing solutions has become a way to add value and deepen relationships with their merchants. Merchant financing companies offer loans based on a business’s future credit and debit card sales, with repayment terms structured to be flexible and manageable.
  4. Consumer lending: Merchant acquirers provide point-of-sale financing solutions that allow consumers to finance their purchases without having to go through the traditional bank loan process. Consumer lending is attractive to merchants as it can help increase sales and customer loyalty while reducing shopping cart abandonment rates

How does merchant acquiring work?

The merchant-acquiring process typically involves four key players: the cardholder, the issuer, the acquirer and the merchant. They each have their own part to play in the overall process, outlined below:

  • Cardholder: A cardholder is someone a financial institution has approved using a credit or debit card. In the case of merchant acquisition, the cardholder is the customer using their credit or debit card to purchase from the merchant.
  • Issuer: An issuer is a financial institution that provides payment cards to consumers and small businesses. When a cardholder purchases with their card, the issuer licenses the merchant to accept the card as payment.
  • Acquirer: An acquirer is a bank or other financial institution that processes card payments on behalf of a merchant. When a customer pays with a credit or debit card, the acquirer routes the transaction to the appropriate card network and obtains approval from the card issuer. The acquirer then deposits the funds into the merchant’s account and sends a confirmation to the merchant.
  • Merchant: A merchant is a person who owns or operates a business. The term also refers to someone who trades in goods or services. In the context of merchant acquiring, a merchant is an individual or organization that accepts credit and debit card payments on behalf of other businesses.
An image of a credit card used in the merchant acquiring process

Merchant acquisition process explained

The cardholder initiates a transaction by presenting their card to the merchant. The merchant then contacts the acquirer, who obtains authorisation from the card issuer. Upon approval, the acquirer approves the transaction to transfer the funds from the card issuer to the merchant. Merchant acquiring can be performed by a bank or other financial institution specialising in credit and debit card processing. Sometimes, a merchant may work with multiple acquirers to provide their customers with more payment options.


In summary, merchant acquiring enables merchants to accept payments from customers online. Merchant acquirers facilitate these transactions, providing technology, infrastructure, and extra services such as fraud prevention and dispute resolution. To ensure customers have the most secure shopping experience possible, choosing the merchant acquirer for business needs is essential. Learn more about how we are accelerating economic growth for Africa through payments. 


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