Local Acquiring

Why local acquiring is essential for increasing authorizations at checkout

Written by Rebekah Moss 04 Apr 2022 - 3 Minutes reading time

Guest post by Imogen Walker

What is local acquiring?

To start things off simply, let's refresh what acquiring is before delving into local acquiring. Acquiring is an essential part of the payment process.

As part of the processing solution, an acquirer will work with a payment processor to decide how much it will cost for a merchant to take payments from customers and settle those fees into the account they hold with the acquiring bank. As a result, ‘local acquiring’ helps keep the fees a merchant must pay low, by routing transactions to locally based acquirers.

The benefits of local acquiring

Local Acquirers are located in the same region as the issuing bank the customer is using. Below, are some key advantages a merchant should consider when thinking about the most cost-effective way to take payments.

1) Fewer cross-border fees

Cross border fees mainly consist of interchange, scheme and processing fees, which are usually increased when processing transactions overseas. However, merchants can save on these added costs by using local acquirers; ultimately saving businesses an increasing amount of revenue as they grow.

2) Increase authorisations

The customer card is more recognisable to a local acquirer and is more likely to be accepted at the checkout.

3) Greater range of payment methods

Using a local acquirer will increase acceptance of local payment methods in that region, as well as cater to global preferences such as Apple Pay. Local acquirers will typically be able to offer merchants a larger range of payment methods to process within the country they want. This will increase customer satisfaction and decrease the likelihood of purchase abandonment at checkout.

Local acquiring in a post-Brexit & post-Covid world

If your business is thinking of implementing a local acquiring strategy, then there is no time like the present. Local acquiring can be used as part of a multiple acquiring strategy through your payment processor and can also assist with larger volumes of process traffic to reduce declines.

The impact of coronavirus has led to an exponential increase in ecommerce shopping globally, and with it - cross-border commerce. With ecommerce sales expected to reach $5.42 trillion by the end of this year, the cross-border ecommerce market share has increased from 15% in 2016 to a projected 22% in 2022, estimated at US$156 trillion. UK merchants should also consider the impact of Brexit on card fees and EU regulations - such as the cap on interchange fees..

As a result, card schemes such as Visa and Mastercard can now vastly increase transaction fees for UK businesses taking payments in the EEA and EU as well as overseas. These new factors highlight the necessity of businesses to consider selling in multiple countries and the cost-effectiveness of using local acquiring to facilitate the process.

How can Total Processing help?

The only hassle with using local acquirers is that merchants need to set-up merchant accounts in each market they decide to transact in, which often involves multiple agreements, contracts, and time that merchants cannot sacrifice. A solution to this problem is to choose a payment partner like Total Processing, who have the facilities to connect to a network of hundreds of acquirers and ensure merchants can process with acquiring banks local to them. This alleviates all the pressure and paperwork for merchants, while enabling them to make the best decisions for their business. Get in touch today to learn more.


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