Plastic cards are a convenient substitute for cash. They are compact, safe and easy to use. But the already familiar mechanism of payment for goods using a plastic card rarely makes people think about what processes occur during the contact of a bank card with a payment terminal. Therefore, today we’ll talk about processing systems.
Term
To describe the whole essence of this phenomenon in an accessible manner, several terms must be introduced. Processing is a process of processing information used to make a payment using a bank plastic card. It follows that the processing system is a system that provides information processing during operations using plastic cards.
Processing schemes always contain three mandatory participants:
- The acquiring organization that is responsible for making the settlements.
- Issuing bank issuing payment plastic cards.
- A payment system that acts as an intermediary between the acquirer and the issuing bank.
Companies that provide services for the provision and maintenance of software necessary for processing are called "processing centers." They are one of the links in the acquiring system.
The main goal of the processing system is to ensure continuous and uninterrupted communication between all participants in the processing scheme. Otherwise, making payments using bank plastic cards will become impossible.
Acquiring system: what is checked during the calculations?
In the few seconds that are needed to conduct a payment transaction, the acquirer checks the data, without which it is impossible to carry out a transaction. Among them:
- The capacity of a plastic card.
- Amount of funds available for debiting.
- Issuing bank status.
In addition, it is the processing system that is responsible for the security of payments, which is understood as the safety and confidentiality of transactions, as well as protection from fraudsters.
Processing system: organization features
From the foregoing, it is easy to understand that processing is a rather complicated process that requires a responsible and serious approach to its organization. The processing system should promptly monitor transactions between holders of plastic cards, issuing banks, payment gateways and other things. To do this, use autonomous payment processing systems, which are most often found in the field of electronic commerce.
The organization of processing includes:
- Checking the status of plastic cards (balance, status, etc.).
- Transfer of information about a request for a transaction to the issuing bank.
- Processing the bank details protocol.
- Creation and maintenance of a database.
- Generating reports and transmitting them to the issuing bank (daily).
- Processing stop lists and bringing information to counterparties.
In addition to this, processing centers can issue plastic cards, personalize and protect them.
Types of Processing Systems
Processing systems are conventionally divided into “white”, “gray” and “black”. Their status depends on the legality of the operations:
- The whites. Before cooperation, processing systems should check the legal status of the issuing company and the legality of the transactions. White processors work exclusively with trusted companies that regularly pay all local and international taxes. As a rule, the “white” international precession systems are residents of the European Union or the United States of America.
- The grays. Gray processing centers can serve not only a legitimate business, but also suspicious companies that are in a high-risk area. However, if the legitimacy of a firm’s business is in question, gray processors may refuse service. Therefore, you need to be able to negotiate with them in order to get the optimal ratio of price and quality of services. Most often, “gray” processing centers are residents of Asian countries.
- Blacks. This type includes all processors that work with any business, even frankly illegal. Naturally, it is quite difficult to find representatives of these companies, therefore, in order to conclude a service contract, clients have to look for a way out for the right person. Most often, the "black" processing centers are represented by Chinese banks or odious offshore companies.
Security
The main threat to the security of any processing system of the bank is hackers. Each time, their methods of influence are becoming more aggressive each time, so the security service is an integral part of any processing center.
In 2006, a key standard for the safety of plastic cards was developed, to which absolutely all participants in the processing system, PCI DSS, must comply. More than 600 qualified specialists from various fields took part in its development. That is why this standard is relevant to this day.
PCI DSS Security Standard: Obligations
Based on the text of the document, clear obligations are imposed on all participants of the processing scheme making remote payments using a plastic card:
- For issuing banks. The legal entity engaged in the issuance of plastic cards must ensure their security against unauthorized access. Mandatory conditions include: applying a chip, placing a security code (CVC2, CVV2, etc.), assigning a magnetic track with the name of the owner, protecting the card with a pin code, 3D-Secure function. In addition, the data on the owner of the plastic card should be stored by the issuing bank exclusively in encoded form.
- For processing centers. To take part in financial activities, processing centers must receive an international certificate of compliance with security requirements, as well as undergo mandatory re-certification during the period of their activities. In addition, the employees of the company when hiring are checked by the federal security service, which constantly monitors their subsequent participation in the processing scheme.
Processing systems in Russia
Previously, banks primarily used only international processors to conduct operations. Now the trend is changing. They prefer to create their own processing centers. This allows them to free themselves from dependence in third-party companies, as well as independently introduce new technologies. And this applies not only to banks. Large firms are also working on the creation of processing systems. For example, on the secure.sirena-travel.ru website, the processing system used to make the payment is the result of development based on Sirena-Travel solutions.
But one way or another, the use of payment systems such as Visa or MasterCard obliges banks to use international international processing systems. A striking example of such cooperation is Sberbank and the Way4 processing system.
The main drawback of domestic services is locality. Each bank develops processing exclusively for personal use, which, in turn, does not allow combining all payment schemes into a single system.
Advantages of creating your own processing system
Sometimes the creation of personal processing is financially disadvantageous for banks. But for some reason, they still invest in it. Most often this is due to the following advantages:
- Reducing the cost of servicing electronic payments.
- Independence from third-party firms.
- The rapid introduction of new technologies and features.
- Risk reduction when transferring data to a third-party organization.
To date, the largest developer of processing card systems in Russia is the United Credit Card Company, which serves about 20% of transaction volume. More than 90 domestic and foreign banks cooperate with her, stimulating the expansion and improvement of the quality of the services provided.