Acceptor

What Is an Acceptor?

An acceptor is the person (or bank) who is expected to pay a check or draft when it is introduced for payment.

Figuring out an Acceptor

Depository institutions have capital requirements that regulatory agencies, like the Bank for International Settlements, the Federal Deposit Insurance Corporation, or the Federal Reserve Board, have set in place. These capital requirements guarantee that banks have sufficient capital to respect withdrawals assuming they support operating losses. Sticking to capital requirements guarantees that a bank will actually want to act as an acceptor and get a sense of ownership with every one of the checks that customers present.

The 2008 global financial crisis hastened the death of the [Dodd-Frank Act of 2010](/dodd-frank-financial-regulatory-change bill), which guaranteed that the biggest U.S. banks would keep up with sufficient capital to endure systematic shocks without defaulting. On the off chance that several major commercial banks were to default, it very well may be catastrophic, particularly for retail customers and high net worth customers.

An acceptor may likewise be a party in a contractual agreement called an acceptance, utilized in international trade. In an acceptance, an importer consents to pay the amount due for goods received at the maturity date. A document is drafted and the buyer of the goods or importer consents to pay the draft and states "acknowledged," or comparative phrasing, demonstrating acceptance on the document. By then, the buyer turns into the acceptor and is committed to make the payment by the predetermined date from here on out.

Illustration of an Acceptor

An illustration of an acceptor is a bank that acknowledges a check drawn against it and takes care of its payment. Assume that Company XYZ has paid Electric Company ABC through a check drawn against Bank DEF. At the point when Electric Company ABC presents the check for payment, and the bank consents to pay the check, it turns into the acceptor.

Highlights

• Depository institutions have capital requirements that regulatory agencies have set in place to guarantee that banks have sufficient capital to respect withdrawals assuming they support operating losses.
• An acceptor is the person (or bank) who is expected to pay a check or draft when it is introduced for payment.