Over the past years, banks have faced many challenges—from declining revenues from traditional business lines and intensifying competition from fintech and tech giants to the never-ending struggle to modernize legacy infrastructures. Banks are pushed to seek new revenue streams to bolster their bottom lines. And there's one area that they've long abandoned but that now looks especially promising for boosting revenues: online acquiring.

Fintech Competition Drives Banks from Online Acquiring

Online acquiring is the process through which businesses accept payments for goods and services online, facilitated by acquiring banks or payment processors. This system allows merchants to process credit and debit card transactions, enabling them to sell products online efficiently.

There were several reasons why banks began to withdraw from offering online acquiring services. For one, it was costly and complex for them to establish and maintain their own payment-acquiring systems.

Banks relying on legacy systems just couldn't keep pace with the rapidly changing e-commerce demands, which came with new system requirements. As specialized providers and fintech Fintech Financial Technology (fintech) is defined as ay technology that is geared towards automating and enhancing the delivery and application of financial services. The origin of the term fintechs can be traced back to the 1990s where it was primarily used as a back-end system technology for renowned financial institutions. However, it has since grown outside the business sector with an increased focus upon consumer services.What Purpose Do Fintechs Serve?The main purpose of fintechs would be to suppl Financial Technology (fintech) is defined as ay technology that is geared towards automating and enhancing the delivery and application of financial services. The origin of the term fintechs can be traced back to the 1990s where it was primarily used as a back-end system technology for renowned financial institutions. However, it has since grown outside the business sector with an increased focus upon consumer services.What Purpose Do Fintechs Serve?The main purpose of fintechs would be to suppl Read this Term companies emerged, banks found it increasingly difficult to justify the investment required to maintain this business. So, they chose to drop online acquiring and focus on core banking services.

Returning to Online Acquiring: A Strategic Move

Nowadays, the online acquiring market presents an attractive revenue opportunity for banks again. E-commerce sales are steadily growing, taking an increasing share of the sales pie. Globally, online sales are estimated to surpass $5.3 trillion in 2026. Moreover, open banking has triggered new transaction types, such as account-to-account payments Payments One of the bases of mediums of exchange in the modern world, a payment constitutes the transfer of a legal currency or equivalent from one party in exchange for goods or services to another entity. The payments industry has become a fixture of modern commerce, though the players involved and means of exchange have dramatically shifted over time.In particular, a party making a payment is referred to as a payer, with the payee reflecting the individual or entity receiving the payment. Most commonl One of the bases of mediums of exchange in the modern world, a payment constitutes the transfer of a legal currency or equivalent from one party in exchange for goods or services to another entity. The payments industry has become a fixture of modern commerce, though the players involved and means of exchange have dramatically shifted over time.In particular, a party making a payment is referred to as a payer, with the payee reflecting the individual or entity receiving the payment. Most commonl Read this Term and request-to-pay systems.

In some regions, these innovations are growing at a faster rate than traditional payment methods like cards or digital wallets. This rapidly expanding digital commerce landscape poses new revenue opportunities for banks.

Some major retail banks, such as Barclays in the UK, have already returned to online acquiring. This strategy has proven successful, particularly through its Barclaycard merchant services—in Q3 2023, Barclaycard UK saw a 9% increase in acquiring volume compared to 2022.

It's also worth mentioning that Barclays has recently placed great focus on integrated digital solutions and APIs that enable quicker payments and streamlined treasury operations. This further improves e-commerce experiences for businesses, allowing Barclays to attract more merchants to their platform. This, in turn, leads to increased transaction volume and higher revenue for their online acquiring business.

In this 1Q 2025 Bank Director magazine article, some of the more experienced #acquirers in the industry talk about their #strategies & how to make an acquisition work.https://t.co/10d3oDhMsr @BankDirectorEd pic.twitter.com/wW0yWhEWY7

— Bank Director (@BankDirector) January 8, 2025

Fierce Competition Challenges Banks in Online Acquiring

Banks are well-positioned to capitalize on online acquiring. They have the necessary financial resources, regulatory expertise, and technical knowledge to succeed. No less important—banks have long-standing relationships with merchants and enjoy a high level of trust from both businesses and consumers.

Then, there's the “but.”

The online acquiring market has changed and evolved since banks left this space. Today, banks face stiff competition from established online acquiring companies (think Adyen or Stripe), as well as smaller fintechs. These competitors have built their businesses around seamless customer experiences, which has allowed them to capture significant market share.

So, now what?

How to Catch a Moving Train

Banks have to find a way to enter or re-enter the highly developed online acquiring market. And there are a number of options to do it.

They can build an in-house gateway from scratch. But that's an expensive and time-consuming process many may not have the luxury to pursue. Alternatively, they can outsource to a third-party online acquiring specialist. However, that significantly limits a bank's ability to grow market share and profitability in this sector.

New data reveals banks aren't buying fintechs:

- <1% of fintech acquisitions by banks (2013-2023)
- Only 13% of deals over $300M
- Cultural mismatches hinder success
- Banks prefer services over ownership.

Bad news for fintechs seeking bailouts.#FinTech #BankingTrends… pic.twitter.com/hFPGGnfWxs

— Cyprx Research Lab Official (@CyprxResearch) January 9, 2025

Finally, there's an option to partner with a white-labeled acquiring solution delivered as a service (SaaS). This approach offers several advantages, including cost-effectiveness, scalability, faster time-to-market, regulatory compliance support, seamless integration, and opportunities for additional services.

Partnering with acquiring-as-a-service (AQaaS) solutions allows banks to capitalize on the online acquiring opportunity while maintaining control of their merchant relationships. This way, they're in charge of leveraging their brand trust while benefiting from the technological expertise of specialized providers.

Don't Be Late to the Party

The potential benefits of returning to online acquiring are substantial. But it's crucial to choose the right strategy. An AQaaS partner can help banks create new revenue streams and offer merchants a comprehensive suite of digital financial services—in an effective and seamless way.

However, banks must move quickly. The online acquiring market is evolving rapidly, and those who hesitate may find themselves left behind—much as many banks did in the Buy-Now-Pay-Later market. To secure a share of the growing online acquiring market, banks shouldn't wait to embrace this agile, tech-centric strategy.