In today’s digital era, businesses are no longer limited to cash transactions. Customers now prefer to pay using cards, mobile wallets, or QR codes. This convenience is ensured by POS (Point of Sale) Acquiring Businesses. It is a service where banks or financial institutions enable merchants to accept card payments and ensure secure transactions.
In Bangladesh, several banks have recently been providing POS acquiring services with remarkable success. Although some challenges remain, the industry is steadily progressing.
What is POS Acquiring?
POS Acquiring is a process where a bank or financial institution (known as the Acquiring Bank) provides merchants with POS machines or payment gateways. This allows customers to pay using their debit, credit, or prepaid cards.
To put it simply, when a customer uses a card, the acquiring bank takes responsibility for transferring that payment to the merchant’s account.
Through a formal agreement, the acquiring bank provides merchants or retail businesses with the necessary digital payment infrastructure, such as POS machines and QR code solutions. When customers make payments using debit, credit, or prepaid cards, the transaction is processed through the designated card networks and payment gateways.
According to the agreement, the acquiring bank settles the collected amount into the merchant’s account, but deducts a certain percentage of the transaction as a service fee. This fee is called the Merchant Discount Rate (MDR), which is the primary revenue source of POS acquiring businesses.
How POS Acquiring Businesses Work
▣ Merchant Agreement – A formal contract is signed between the merchant and the acquiring bank.
▣ POS Machine/Payment Gateway – The acquiring bank sets up POS terminals at physical stores or payment gateways for online businesses.
▣ Transaction Process – When a customer makes a payment using a card, the transaction request is sent to the acquiring bank’s server.
▣ Authorization – The card-issuing bank (Issuer Bank) authorizes or declines the transaction.
▣ Settlement – The acquiring bank deposits the payment into the merchant’s bank account, usually within 1–2 business days.
Benefits of POS Acquiring Businesses
▣ Convenient Payments for Customers – Eliminates the hassle of carrying cash.
▣ Increased Sales for Merchants – Accepting card payments builds trust, particularly among affluent customers who feel more comfortable and respected when paying with cards.
▣ Secure Transactions – Reduces risks related to counterfeit bills, torn currency, and the need for additional manpower.
▣ Reporting & Tracking – Merchants receive detailed daily and monthly transaction reports.
▣ Online & Offline Support – Can be used in both physical retail stores and e-commerce platforms.
Revenue Sources of POS Acquiring Businesses
Banks and acquiring institutions generate revenue through multiple channels:
▣ Merchant Discount Rate (MDR) – A percentage charged on each transaction, as previously explained.
▣ Service Charges – For POS machine maintenance and customer support.
▣ Settlement Fees – Fees for transferring collected funds to the merchant’s account. This is one of the major sources of revenue.
Challenges and Limitations
▣ High MDR (Merchant Discount Rate) – Discourages small businesses as MDR charges vary across banks and financial institutions.
▣ Network and Technical Issues – Transactions may fail due to network downtime or device errors, often causing frustration for customers making essential purchases.
▣ Fraudulent Transactions – Although EMV chip-based cards have significantly reduced fraud compared to magnetic stripe cards, risks still exist.
▣ Limited Rural Penetration – In rural areas of Bangladesh, POS solutions remain less accessible, and many people are unfamiliar with these technologies.
▣ Unethical Merchant Charges – One of the major challenges in Bangladesh is that some merchants impose extra charges on customers despite contractual agreements prohibiting it. This unethical practice confuses and embarrasses customers, damaging their overall payment experience and undermining trust in the digital payment ecosystem.
POS Acquiring Business in Bangladesh
Several banks and payment solution providers in Bangladesh currently offer POS acquiring services, including:
▣ City Bank
▣ BRAC Bank
▣ Dutch-Bangla Bank
▣ Eastern Bank
▣ Prime Bank
▣ Pubali Bank
▣ United Commercial Bank
These institutions are enabling businesses with POS machines, QR payment solutions, and online payment gateways to make transactions more convenient.
So, POS acquiring businesses have become a driving force for modern transactions. They are helping merchants boost sales, providing customers with convenient payment options, and moving the economy toward a cashless ecosystem.
Merchants who are still dependent solely on cash transactions should adopt POS acquiring systems as a future-proof solution for their businesses.