Which institution does an acquiring bank typically contract with?

An acquiring bank typically contracts with merchants in order to facilitate electronic payment transactions. Merchants are businesses that accept credit and debit card payments from consumers. The acquiring bank provides the necessary services to process these transactions, including managing the merchant account, underwriting the merchant's business, and providing access to payment networks. This relationship ensures that merchants can accept card payments, which is essential for their operations and customer service.

Additionally, while acquiring banks may interact with other entities such as third-party processors or regulatory bodies, their primary contractual relationship is with merchants. This direct connection allows for streamlined transaction processing and support tailored to the merchant's specific needs, making it crucial for a successful payment ecosystem.