Functions and risks of the acquiring bank

Contactless payments for the last few years have strongly infiltrated the lives of Russians. Technology allows consumers who do not have paper bills to make purchases. Let's consider in more detail the process of acquiring and all participants of this scheme.

The Essence

A plastic card is a payment tool that provides access to finance. After reading the data from it, you can find out information about the owner and the balance of funds on the account. For these purposes, the terminal uses terminals. Entering a pin-code, the card holder gives the permission to write off means for the payment of goods. Then several organizations are included in the payment process.

The participants

The issuing bank and the acquiring bank are involved in the payments. Let us consider in more detail the functions of each of them. The acquiring bank is the bank that configures the card acceptance points. For these purposes, the credit institution uses terminals, advises the organization's personnel on the issues of accepting and canceling payments, and configures the software. But this is not all the functions of the acquiring bank. The credit institution conducts:

• Authorization and verification of creditworthiness of the card;
• Processing of incoming requests;
• Transfers funds to the account of the outlet;
• Processes the documentation supporting the transaction;
• Distributes lists of banned (stolen, overdue) cards.

The issuing bank issues and maintains a payment card, opens an account for cash flow. The same institution can be an acquirer and an issuer simultaneously. In this case, the POS-terminal and the customer card will be issued by one agency. But if a client has a Tinkoff Bank card and withdraws funds through an Sberbank ATM, the first credit institution is the issuer, and the second is the acquirer. The point of service is called a trade and service enterprise (TSP).

Processing center

To confirm the operation, the cardholder must enter the PIN code. Immediately after this, the acquiring bank starts the process of checking the code, the functioning of the bank, the balance on the account. To receive this data, a request is sent to the processing center. If any deviations are detected, the transaction is not allowed to the acquirer bank.

The processing center is the foundation on which electronic operations are built. This is an automated system for processing bank card transfers. Its main task is to give shops the opportunity to accept non-cash payment. The processing center also performs mutual settlements between the issuer and the acquirer, the sales point and the card holder. In Russia, the PayOnline center coordinates payment for VISA and MasterCard cards.

Payment system

The advantage of non-cash settlements is that they can be used anywhere in the world. But the ability of the acquiring bank is limited. One institution can not technically organize settlements with all sales outlets or install ATMs everywhere. The communication function is performed by the payment system. Upon request from the processing center, it checks the solvency of the card. If the balance is sufficient for the operation and the financial institution is a participant in the system, it sends a request for an electronic operation.

Billing company

Another link that can be present in the chain. The billing company, like the payment system, takes the function of transferring the transaction to the acquirer, but additionally monitors and manages the risks, organizes access to detailed statistics on transactions, provides settlements with account holders.

Bank Internet acquirer

The principle of online payment is similar to the process of buying goods in the store. Only the way information is transmitted differs . In the first case, the data is read by the terminal, and in the second case the client independently enters them into a special form on the site. The functions of the acquiring bank are performed by a credit institution servicing the organization of transactions. All participants of the cashless settlement system must have reliable communication channels and equipment, which provides a fast process of verification and data transmission.

Commission

Acquiring is not a free service. Several participants in the transaction are responsible for the payment process. The payment system ensures the interconnection of outlets and lending institutions around the world, for which it receives a commission in the range of 1-1.1% of the payment amount. The same amount is sent to the issuer for the transfer of funds. Well, of course, the commission of the acquiring bank. The market average tariff is 2-4%. The scope of commission fees is also affected by the scope of TSP, the turnover of funds on the account with the client, the type of connection and the type of device.

The scheme

The most common scheme of work when a point directly connects to the equator, for example, through a terminal or a special form on the Internet site. In this case, the bank must develop software for receiving payments and monitor the status of communication channels. The store must provide the transaction, organize the protection of the server, monitor transactions in order to identify potential scammers. If the hierarchy of the online store is complicated, then the implementation of the system should be handled by programmers. And this is additional costs.

Risks of the acquiring bank in the bankruptcy of TSP

In the event of bankruptcy of an organization that provides services to people, credit institutions have a risk of return of funds to cardholders. Not all transactions are paid at the time of purchase. For example, tourists, going on a trip, book hotels and plane tickets in advance. In the event of bankruptcy of the tour operator, customers will demand refund for paid, but not received services.

A striking example of this situation is the collapse of Transaero. The financial institution accepted payment on cards for deferred tours and air transportation, but went bankrupt. Under the rules of international systems in such situations, the problem of the return of funds falls on the acquiring bank. According to preliminary data, the losses of participants in transactions may amount to hundreds of millions of rubles. At the same time, it does not matter how exactly the payment was made: directly at the point of service, via the Internet or by billing. In all cases the financial responsibility is borne by the acquirer.

Refunds

If an error occurs with the acquirer bank server, the money is returned to the buyer's account. The procedure provides for the client's request to the bank, which draws up and passes the application to the acquirer. A credit institution must return the money. Another thing is that in the case of the example considered with bankruptcy of the company to compensate for losses, the bank will be able only in the process of liquidation of the organization.

Tougher requirements

In view of the situation with Transaero, the bankers intend to revise the conditions for servicing the TPN. So, it is proposed to introduce additional guarantees in the form of a pledge or deposit, confirming the client's solvency. Among other options, it is also considered an option to increase the term for crediting funds to the TPN account up to two weeks. This practice was already in the 2000s. But in modern conditions, such measures will lead, rather, to the loss of customers.

news

Bank "Russia" has developed its own acquiring internet payment for using natural gas. Clients of Gazprom Mezhregiongaz can pay for natural gas through the site of Bank Rossiya. To do this, you need to go to the page of the credit institution in the online payments section and transfer the funds to the account number.

Bank "Saint Petersburg" began accepting cards of the national payment system "Mir" in its network of ATMs, branches and terminals.

Bank "Russian Standard" since April 6, 2016 began to serve chip cards of the international system Diners Club International (DCI). Transactions are carried out according to the international standard EMV. This ensures a high level of security operations. The right to issue exclusive Diners Club cards from the acquiring bank appeared in 2011. Since then, the lending institution is the only one in the country that is responsible for the promotion and status of the brand.