Does local acquiring improve approval rates?
Usually, yes. Issuers approve domestic transactions more readily than foreign-acquired ones, and the EBA and ECB measure cross-border card fraud rates at more than seven times the domestic rate, which makes issuers cautious. A local acquirer turns the transaction into a domestic one, with domestic interchange and scheme fees as well.
In detail
Usually, yes. Issuers approve domestic transactions more readily than foreign-acquired ones, and the EBA and ECB measure cross-border card fraud rates at more than seven times the domestic rate, which makes issuers cautious. A local acquirer turns the transaction into a domestic one, with domestic interchange and scheme fees as well.
What is multi-acquiring?
Schemes classify a transaction as domestic when issuer and acquirer are in the same country, intra-regional when both are in the same region, and inter-regional otherwise. Domestic transactions carry the lowest interchange, the lowest scheme fees and the highest approval rates. A local acquirer in each key market turns foreign traffic into domestic traffic.
What do the scheme rules say about domestic and cross-border acquiring?
For cards issued outside the EEA, Visa and Mastercard committed to cap inter-regional interchange at 0.2% and 0.3% in store and 1.15% and 1.5% online for debit and credit, commitments extended until November 2029. Those caps are the ceiling, not the floor: a local acquirer in the cardholder’s country turns the same transaction into a domestic one, priced under the national regime.
More detail in our #PayDecoding episode on Multi-acquiring.