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Payment Cards Payment Cycle Introduction.

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Presentation on theme: "Payment Cards Payment Cycle Introduction."— Presentation transcript:

1 Payment Cards Payment Cycle Introduction

2 Card Payment Cycle

3 Across The Payments Spectrum

4 Supported card product types Credit Revolving Charge Debit Corporate Pre-paid Instalments Affinity Cards Proxy / Virtual Cards (e-Card) Private label (profiled cards) Co-Branded Cards Payroll Cards Health Cards Remittance Cards Travel Cards Gift Cards Custom Electronic Purse Support issuance of Magnetic stripe and Chip (VSDC/M/Chip) cards:

5 Credit Card Authorisation and Clearing System Flow

6 Credit Card Authorisation and Clearing Types 1. Local Card used in Counrty On-Line 2. Local Card used in Counrty On-Line- On-Us 3. Local Card used in Counrty Off-Line 4. Local Card used outside of Counrty - Method 1 5.Local Card used outside of Counrty - Method 2 6. Foreign Card used in Counrty – Method 1 7.Foreign Card used in Counrty – Method 2

7 BKM Switch System BANK-A ACQUIRER BANK-B ISSUER BANK-C

8 8 BKM A.Ş. Approve/Reject Credit Card of B BankPOS machine of A Bank I want to pay with my Credit Card Credit Card On-Line Authorisation BANK-A ACQUIRER BANK-B ISSUER Approve/Reject Merchant Card Holder Local Card used in Turkey

9 9 BKM A.Ş. Approve/Reject Credit Card of B BankPOS machine of B Bank İŞYERİ I want to pay with my credit card Authorisation if Issuing Bank can not respond to BKM query BANK-A ACQUIRER Based on Predetermined Limits Approved by Issuing Bank to be used in case of lack of communication of BKM with the acquiring bank Approve/Reject Merchant Local Card used in Turkey

10 Approve/Reject Credit Card of A Bank POS machine of A Bank I want to pay with my credit card On-Us Transactions BANK-A ACQUIRER Merchant Local Card used in Turkey Card Holder

11 BKM A.Ş. Approve/Reject Issuing Bank routes it first toBKM and BKM routes it to Visa or MasterCard Method 1 BANK-B ISSUER VISA/MC Approve/Reject I am a Turkish citizen. I want to use my card outside of Turkey Approve/Reject Local Card used outside of Turkey Local Card Holder Foreign Merchant International Authorisation Process is executed BKM can only handle the Authorisation. Cleaing and Settlement should be done with VISA and MasterCard

12 Approve/Reject Issuing Bank routes it directly to Visa or MasterCard Method 2 BANK-B ISSUER VISA/MC Approve/Reject I am a Turkish citizen. I want to use my card outside of Turkey Local Card used outside of Turkey Local Card Holder Foreign Merchant International Authorisation Process is executed

13 BKM A.Ş. Approve/Reject Credit Card of a Foreign BankPOS machine of A Bank İŞYERİ If Issuing Bank is not a Local Bank the Acquiring Bank routes it first toBKM and BKM routes it to Visa or MasterCard Method 1 BANK-A ACQUIRER VISA/MC Approve/Reject I am a foreigner. I would like to pay with my credit card in Turkey Merchant Approve/Reject Foreign Card used in Turkey

14 Approve/Reject Credit Card of a Foreign BankPOS machine of A Bank If Issuing Bank is not a Local Bank Acquiring Bank routes it directly to Visa or MasterCard Method 2 BANK-A ACQUIRER VISA/MC Approve/Reject I am a foreigner. I would like to pay with my credit card in Turkey. Merchant Foreign Card used in Turkey

15 BKM HESABI BKM - YTHS ACQUIRER ISSUER CARD HOLDER MERCHANT OUTGOING TAKAS DATA TCMB BKM FUND TRANSFER OUTGOING TAKAS DATA INCOMING TAKAS DATA + O/I REPORTS INCOMING TAKAS DATA + O/I REPORS PAYMENT SALES INFORMATION PAYMENT STATEMENT CREDIT CARD TRANSACTION PRODUC/SERVICE Domestic Reconciliation/Settlement BKM Central Bank A BANK B BANK

16 Debit Card Online POS Authorisation Flow (Domestic & International) Cardholder BKM Issuer (Authorisation Institute) Domestic Purchase International Authorisation Domestic Authorisation (BKM ISO8583 format) Merchant Visa/MasterCard International Purchase Payment Schemes: MasterCard Visa Acquirer International Authorisation Domestic Authorisation (BKM ISO8583 format) International Authorisation (BKM ISO8583 format) International Authorisation

17 Debit Card Online Clearing & Settlement Flow (Domestic) Cardholder BKM Issuer Domestic Purchase Domestic Clearing (BKM format) Net Settlement Merchant Acquirer Domestic Clearing (BKM format) Domestic Clearing (BKM format) Net Settlement Central Bank* * All Acquirers & Issuers including BKM have Clearing Bank accounts within the Central Bank, therefore funds simply transfer between accounts. Net Settlement

18 3D Secure Storefront API’s Reporting Fraud Protection Payment Banks Secure e-Payment Infrastructure Customer EST Secure e-Payment Gateway EST Secure e-Payment Gateway

19 Future of Payments Further erosion into cash and other non card payments Need to ensure balance between parties to foster growth Risk will continue to be major concern Regulators will continue to oversee New technologies and channels –Mobile –Voice –Contactless –E-payment –Maximisation of the chip on the card


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