What is the primary role of the acquiring bank in card payments?

• A. Issues cards to customers
• B. Routes transactions through the card network to the issuing bank
• C. Handles customer support
• D. Sets exchange rates for settlements

Answer: (B)

In card payments, the acquiring bank is the merchant’s bank that processes card transactions. Its main job is to get the sale authorized by routing the payment data through the card network to the cardholder’s issuing bank. The issuer evaluates the request, checks available funds and fraud risk, and returns an approval or decline through the network back to the acquirer, which then relays the decision to the merchant. If approved, the acquirer settles the funds to the merchant after the standard clearing period. This role is essential because it connects the merchant to the card networks and the issuer, enabling the payment to move from the customer to the merchant.

The other options don’t fit this central function: issuing cards to customers is the issuing bank’s job; handling customer support isn’t the acquiring bank’s primary responsibility in the payment flow; and setting exchange rates for settlements is typically handled by networks or during settlement rather than the acquiring bank’s core role.