What is the primary role of an acquiring bank?

The primary role of an acquiring bank is to process payments for merchants. An acquiring bank is a financial institution that partners with merchants to facilitate the acceptance of card payments, typically for credit and debit card transactions. This includes the handling of transaction authorizations, settlements, and ensuring that the funds from card transactions are transferred from the customer's issuing bank to the merchant’s account.

This function is essential for enabling merchants to conduct business and provide customers with a convenient payment option. By processing these transactions, acquiring banks play a critical role in the payment ecosystem, acting as intermediaries between the merchant and the card networks, such as Visa or Mastercard.

In contrast, the other options highlight different financial roles that are not directly related to the acquiring bank's primary function. For instance, providing credit cards to consumers is a role designated to issuing banks, which manage the credit relationships with cardholders. Similarly, offering insurance for credit transactions and issuing loans to consumers fall outside the purview of an acquiring bank's responsibilities. These roles may be filled by other types of financial institutions or service providers within the broader payments landscape.