Process transactions and give the control to cardholders !

1.Transaction processing overview

Worldline Card Issuing comes with strong authorization and clearing/settlement modules mandated to process any transaction in the card payment ecosystem. Today, these modules are fully compliant with Visa and Mastercard schemes but can obviously be fine-tuned to support other card schemes.

2.Authorization Processing

As illustrated, authorization being the backbone in the approval / rejection of transactions, this module has a strong impact on the Issuer business as:

• It enables to reduce the costs of fraud by being connected to third party system(s) in charge of analyzing fraud patterns,
• And, its decisions directly influence the level of interchanges fees captured.

Fully compliant with EMV authorization standard, our authorization module supports a wide variety of use cases such as:

• Retail transactions done in Point Of Sales or in E-commerce, through a plastic or a virtual card:
  • Purchase (goods and services),
  • Refund (credit) transactions,
  • Mail order / telephone order (MO/TO) transactions,
  • Reversal transactions,
  • Inquiry transactions,
  • Automated Fuel Dispenser (AFD) transactions
• Financial transactions on ATM,
• Non-financial transactions on ATM like Pin change, balance inquiry,
• Money transfer transactions

Two main steps are performed by our authorization module on each incoming authorization request:

1. A technical authentication aiming at verifying the authenticity of the card (and the cardholder) and some card attributes (card status, EMV cryptogram…)
2. A financial authorization covering pure financial checks on the balance or credit lines related to the card.

Technical authentication

Six main controls are performed in standard by Worldline Card Issuing:

1. Format protocol message check aims at controlling the technical format of the message received, this latter having to comply with the scheme definition.
2. Card authenticity check consists in checking if the card is a genuine one. At this stage CVV/CVC, magnetic stripe track format and chip card cryptography controls (standard EMV) are done.
3. Cardholder verification relies on PIN verification either on-line PIN or chip status for offline PIN. The number of PIN tries is also controlled during this step.
4. Card status check aims at controlling several card’s attributes like: the card status (is the card active or blocked), the acceptance context (i.e. ATM/POS, domestic/international).
5. Card restriction check consists in verifying the usage restriction applied on the card:
   • Transaction types
   • Merchant (through Merchant Category Code – MCC)
   • Countries
6. Fraud detection check aims at asking to a specific third party fraud engine, not included in Worldline Card Issuing, to perform a risk assessment based on the transaction context.
   • If needed by an issuer and as an option, we can offer our Worldline Fraud Management service. This service is based on our powerful tools enabling real-time fraud prevention and fraud pattern detection operated by Worldline experts in risk and fraud management.

Once the technical authorization is completed with success, the financial authorization process can start.

Financial authorization

The Issuer can delegate this process to Worldline Card Issuing in two steps :

Velocity checks aiming at verifying if the incoming authorization complies or not with the restrictions set on the card (and related account). These restrictions consist in a number of maximal usage that can be narrowed down using:

• The transaction type (purchase, cash withdrawal etc.)
• The type of the processing (foreign, stand-in, on-us)
• A time dimension aiming at precising if this restriction applies on a fix period in time (weekly, monthly or on a number of day) or on a time interval (rolling or jumping approach)

Below some examples of classical configurations for velocity limits:

• Authorize the use of the card 5 days per week,
• Authorize max 10 transactions for the card per day, 50 transactions for the card per week,
• Authorize max 3 foreign transactions for the card per day

Stand-in for Debit Cards

For debit cards, financial authorizations are given by the issuer (bank host).

Worldline Card Issuing supports switch-outs towards external systems during the authorization process relying, in standard, on JSON or ISO8583 protocols. If the external system for a switch-out is unavailable, on demand of the issuer, Worldline Card Issuing can perform Stand-in Process (STIP) based on the card checks and card usage limits.

A "Store-and-Forward" handling for authorization advice to the external system is supported in this context.

The stand-in processing allows only transaction until a certain amount (for e.g., 300 euro)

Stand-in for Credit Cards

For credit cards, financial authorizations can be fully performed by Worldline Card Issuing making checks on the related credit card accounts supported by the solution. In this context, the financial authorization is granted by checking:

• Credit limit, cleared transactions and pending authorizations to determine the open to buy (remaining global amount to be spent)
• The velocity limits (spending limits)

Once the real-time financial authorization completed, the authorization response (positive or negative) is returned to the terminal through the scheme, allowing to pursue or not the transaction with the cardholder.

3.Clearing & Settlement

The illustration shows how clearing is managed on Worldline Card Issuing. A fundamental part of this process is validating clearing files originating from schemes. For each message contained in these files, several checks are done leading to the posting of operations towards the internal accounting or dispute modules of Worldline Card Issuing. 

In parallel, on a regular basis, ledger files and reports are generated by Worldline Card Issuing and shared with the Issuer’s systems (Core Banking System) and schemes.

Clearing File Management

As soon as a clearing file is received from a scheme, Worldline Card Issuing starts processing it. Note that our solution fully complies with Mastercard and Visa clearing requirement and will store the original messages coming from these schemes (Base II and IPM formats) before translating it in our internal format for our processing purposed.

Regarding clearing file processing, Worldline Card Issuing comes with high level fault tolerance mechanisms allowing to:

• Pursue the processing of a file in case of error happening on a message,
• Detect duplicated files,
• Re-process only unknown messages when re-integrating a file after an error occurred.

Besides of the high level technical processing checks this checks are

• Issuer Identification: for each message, this first step consists in identifying the issuer by analysing an identifier in the incoming message.
• Card Check process: for messages containing a PAN, Worldline Card Issuing is going to check if the PAN is known by the system and the status of the card related to this PAN. A card “blocked” for instance will lead at the end, to the post of an operation towards the dispute management system whereas, in the other case, it will trigger the post of an operation in the accounting module.
• Matching process: in this step, Worldline Card Issuing is going to reconcile the incoming message with the original authorization message. More than creating a logical link between messages enabling to offer an holistic view on a card transaction, this matching process directly impacts the reserved amount and Open to Buy.
• If a matching is done with an authorization, a message to cancel the reserve is sent to the authorization server.
• If no matching is done, a “failing” flow is executed (define with the Issuer) leading either to the post of an operation in the dispute management system or, to the post of an operation in the accounting module.
• Fee messages process: this step is applied for messages related to fees requested either on dispute cases or fees requested by schemes. In the first case (dispute), the “standard” behavior on Worldline Card Issuing will be to feed the dispute management system with this new message whereas, in the other case, Worldline Card Issuing will post an operation in the accounting module (on the specific account setup with the Issuer)
• Embargo process: following European regulation, checks against sanction lists are mandated for certain type of transactions (aka. P2P transactions…). Worldline Card Issuing doesn’t come with an embedded embargo system but offers the possibility to manage a connection towards a third party solution deployed on the Issuer side.
• Posting process: this final step is going to orchestrate, depending about the message received and the previous checks ‘results either the posting of an operation towards the accounting module or, the posting an operation towards the dispute system.
• Posting operations towards the accounting module: based on the settings configured at the product, contract and card levels, the posting process is going to:
  • calculate potential fees that shall be paid by the cardholders to the Issuer (and then debited on the related cardholder’s account),
  • adjust the scheme reconciliation amount using currency conversion if needed. Currency conversion is configurable for the Issuer, with or without the application of a mark-up, using either:
    • ECB rates (European Central Bank),
    • its own rates,
    • specific Scheme rates,
• Posting operations towards the dispute management system: on top of sending a message towards the dispute management system, several specific rules can be defined with the Issuer (not part of the “standard” configuration) to:
  • automatically “Refund” to cardholder,
  • automatically declare a “Fraud” to the Scheme (MasterCom / VROL)
  • automatically generate a “ChargeBack” or a “Write Off”

Settlement Services

Our Settlement Service offers based on the data from the card schemes Visa/Mastercard) and the data from the Worldline Card Issuing system a comprehensive reporting. The reporting serves as the basis for payment transactions between Worldline and the issuer as well as for the following issuer's reconciliation processes.

The Worldline Settlement Service arranges payments to the card (Visa/Mastercard) in the name of and on behalf of the customer (issuer) on the basis of the settlement information.