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Internet acquiring

Internet acquiring

Globalization and the active development of information technologies provides entrepreneurs with the opportunity to make transactions electronically without need of personal presence of both parties during the transaction. Such cooperation between market participants is called electronic commerce or e-commerce.

Transactions may take place between two businesses (B2B), between the business and the individual (B2C), and between two physical persons/customers (C2C).

Settlements between e-commerce market participants can be made with:

  • bank cards;
  • bank payments;
  • e-wallets;
  • SWIFT transfer systems;
  • with prepaid cards and checks;
  • SMS payments.

Payment for goods and services using a credit or debit bank card called acquiring.
Method of payment for goods or services through POS-terminals or imprinters that are installed on trade / service enterprises is called Merchant Acquiring.

Internet Acquiring it is a payment for goods and / or services via the Internet. The customer enters the necessary details of his bank card into a special form on the website of the seller and thus instructs his bank to pay for the selected online product or service.

Service providers are responsible for secure funds transfer. They are engaged by the acquiring bank or processing center. Authentication protocols 3-D Secure and SSL, all kinds of SMS confirmation and other methods of data protection are used to encrypt the client’s data on the payment web page of a product or service.

The cost of internet acquiring services

Service Price
Integration of the different payment systems integration and further maintenance from $200 per month
‘’turnkey solutions‘’ – from $500
Merchant accounts from $600

Connection of Internet acquiring

  1. It is possible to connect Internet acquiring directly with Acquiring bank, which has its own Processing center (open a merchant account);
  2. It is possible to connect the Internet acquiring through a special organization such as Processing center and Payment system provider (PSP) that cooperates with several banks at the same time.

It should be noted, that directly to connect the Internet acquiring through the Processing center of the acquiring bank is possible only for entity, for which the bank will open a merchant account.
The rate for the online acquiring service varies from 1.5 to 13% of each transaction and is determined by the acquiring bank or PSP for each company individually, considering different factors.

The most important factors that rate depends on:

  • Company profile and the degree of riskiness. The higher the risk, the higher the rate will be. Among high-risk companies are: travel agencies, forex brokers, binary options brokers, online casino, software companies, related proposals and services for web design, pharmaceutical companies, lotteries, games, Dating & Adult, File Sharing services and cloud servers for data storage. Other companies are defined as a medium or low risk business;
  • Country and date of registration of the company, the identity of its owner (status, level of education etc.). Of course, the new companies registered in offshore zones with a nominee service are considered to have lower trust level from the acquiring bank or processing center. So the commission rate would be higher;
  • estimated monthly turnover, average amount and number of transactions;
  • reliability of the bank, where a corporate bank account is opened and processing history, if any;
  • the business model of the enterprise is considered;
  • the website of the company is considered too: there should be an information about terms and conditions of service or delivery of the goods, their prices, the refund policy, whether there is a customer support services, if the website is multilingual and much more;

Terms of consideration of application for the Internet acquiring depends on the chosen payment system, as well as the complexity of the project. Approximately it takes from three days to a few weeks.

Terms of the settlement period of the accepted funds to the seller’s merchant account primarily depend on the specific project and the level of business risk. In some cases settlement period can take several days. In other cases, if it is difficult and high-risk projects, the settlement period can be up to a month. Also it is required to have a rolling reserve (security deposit) up to 10% of monthly turnover. The holdback period usually takes from 3 to 6 months.

It is rather complicated to choose the acquiring bank or processing center for Internet acquiring by yourself. It is necessary to sort out all the variety of offerings on the market, take into consideration the large number of nuances, to negotiate and collect the required documents. Unfortunately, despite on wasted time and efforts, this option does not guarantee the proper result. There are many examples of entrepreneurs who wanted to save money, but their applications to get a merchant account were denied by acquiring banks.

We recommend you to rely on the professionals, who know all the requirements regarding internet acquiring and operating terms and conditions of processing centers, acquiring banks and payment systems.

Our experts will assist you in opening a merchant account and to connect Internet acquiring with the most favorable terms.

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