Sunil Joshi

How do acquirers and issuers process credit card payments? . . In general, credit card payment transactions are processed in 3 steps: 🔹 Authorization - check fund availability with the issuing bank 🔹 Clearing - bundle transactions sent to the issuing bank 🔹 Settlement - actual movement of money to the merchant’s bank account The diagram below shows the authorization processing flow of acquirers and issuers. 𝐀𝐜𝐪𝐮𝐢𝐫𝐞𝐫 𝐏𝐫𝐨𝐜𝐞𝐬𝐬𝐢𝐧𝐠 Acquirers manage merchant accounts. When a user presents their card to a merchant, PSP (Payment Service Provider) tokenizes the card details at checkout so that the card credentials are not stored by the merchant. The card details are then encrypted and sent to the payment gateway to route them to a payment processor. The payment processor performs various checks such as card bin check, fraud scoring, etc, and then determines which card network to route to. The transaction is converted to the right message format based on ISO20022 or ISO8583 before sending to the card network. 𝐈𝐬𝐬𝐮𝐞𝐫 𝐏𝐫𝐨𝐜𝐞𝐬𝐬𝐢𝐧𝐠 When the card network receives the message from the acquirer, it detokenizes the payment transaction and runs additional checks. The card network then sends the message to the relevant issuing bank to run a bunch of validations, including pin check, address check, chip check, limit check, balance check, etc. After the checks, the issuer responds back with an approval or decline, which is sent back to the card network and then routes back to the acquirer. 👉 Over to you: Which step is the most complicated one? Reference: Credit Card Payment Processing on AWS — 👉 If you like my FinTech posts, please follow Hua Li and click the 🔔 on my profile to receive updates. #systemdesign #payments #fintech .

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How can US banks win at instant payments? 🇺🇸   Join industry experts Kellie Johnson, James Colassano, Irfan Ahmad and Amber Faedtke, AAP, APRP next week for an in-depth exploration. We'll dive into insights from 300 senior payment professionals at US banks to uncover how to leverage the current momentum and lead in the instant payments space. You'll discover: 🏦 Strategies for transitioning from receive-only to sending instant payments 🏔️ Navigating the top challenges in implementing instant payments 📈 Building a business case for instant payments 🔗 The critical role of global interoperability ❌ Tactics for tackling fraud in the instant payment landscape Register here 👇 https://lnkd.in/eKzWMXCr

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Faster payment adoption up in the US according to the Federal Reserve Board but much more to be done to enable businesses of all sizes to pay on their terms. Tranch works with major enterprises to offer seamless invoice to payment through automation, integrations and a full suite of Tranch payment options from our unique #PayLater proposition, secure #PaybyCard to instant payment processing with #PayNow...there's another payment method coming soon, watch this space 👀 #payments #enterprise #checkout #digital #federalreserve #fednow #rtp

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Three comments on "Banking as a Service" and "Embedded Finance" more broadly. 1. There is massive upside potential. Properly done, BaaS integrates payments, credit, deposits, cash management, & earned wage access into customers' lives in valuable, elegant, seamless ways. 2. It is really hard to do BaaS properly. There are many moving parts, many stakeholders, a lot of novelty / bespoke processes, and a rapidly evolving regulatory approach to what is considered higher risk. 3. BaaS is a scale play. "Go big or go home."The economics improve with decimal places. With no footprint, no branch network, and no relationship management teams, BaaS banks can grow revenues and deposits with relatively modest relative increases in expenses. But the initial investment is substantial to get those first programs up and running: API economy, third party oversight, etc. The break even point is a fairly large number (whether deposits/loans/revenues) I was brought into Five Star Bank as it went "from zero to one" with its largest BaaS program and then several other programs and platforms. I headed the Ops, InfraTech, Product Management and Business Analyst teams. Between them, they handled much of the operational implementation, "partner success", and ongoing administration of the BaaS partners / program / platforms. It was a great experience with many excellent people. I would have loved to see the BaaS business thrive for decades. But I understand the decision, and I have only positive things to say about my former colleagues both at FSB and the many external stakeholders involved in the BaaS relationships. https://lnkd.in/emyAGbdd

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