eft overview

Copyright © 2009. S1 Global Ltd. All rights reserved.

The Module Title is used for

courses such as Payments

Basic Training that have a

modular structure.

Month and year

Payments Basic Training

Module 1: EFT Overview

Copyright © 2009. S1 Global Ltd. All rights reserved. Remember to update the

copyright date

The Slide Title should usually

relate to a heading in the

participant guide (typically

Heading 2 or Heading 3) but

this is not always possible.

If a slide is animated,

move the “play button”

onto the slide and

position it at: Horizontal

0 cm from top left corner

and Vertical 17.84 cm

from top left corner.

• Introduction to Payments Basic Training (PBT)

• EFT Concepts

• Payments System Overview

• Course duration

o ½ day (3 hours)

Module Introduction


Section 1: Introduction to PBT

• Overview

• Training structure

• Module scope


The top row is used to orient

participants by showing them

where they are in relation to

the sections in the participant

guide.

Underline the current section.

For non-terminal sections,

show at least one preceding

and one following section.

Use ellipses to indicated that

there are more preceding or

following sections that cannot

be shown.

Separate sections using the

pipe symbol (on the

backslash key).

Remember to update the

copyright date

The second row of the

heading is used to display

the heading 1 section in the

participant guide to which the

slide belongs.








onto the slide and





Three types of courses

• Payments Basic Training (PBT)

• Payments Specialized Training (PST)

• Payments Development Training (PDT)

Introduction | EFT Concepts | Payments System Overview

Training Structure

Overview






guide.








be shown.


pipe symbol (on the

backslash key).


copyright date





slide belongs.








onto the slide and





• Module 1: EFT Overview

• Module 2: Realtime

• Module 3: PostCard

• Module 4: Office


Training Structure

Core Modules






guide.








be shown.


pipe symbol (on the

backslash key).


copyright date





slide belongs.








onto the slide and





Additional modules — environment specific

• Module 5: ATM Driving

• Module 6: eSocket.POS

• Module 7: TermApp


Training Structure

Elective Modules






guide.








be shown.


pipe symbol (on the

backslash key).


copyright date





slide belongs.








onto the slide and





EFT Concepts

• EFT concepts (incl. S1-specific concepts)

• Payment cards (PANs and routing)

• Payment flows (consumer transactions and settlement)

• EFT protocols (draft capture and ISO 8583 messages)

Payments System Overview

• S1 payments product family

• S1 payments solutions


Module Scope

Main Sections






guide.








be shown.


pipe symbol (on the

backslash key).


copyright date





slide belongs.








onto the slide and





• PBT Certificate

o Questions from modules 1–5

• Scoring

o Less than 64% — Attendance

o Between 65% and 84% — Competence

o 85% and greater — Achievement


Evaluation and Certification

Evaluation and Certification


Section 2: EFT Concepts

• Introductory concepts

• Point-of-sale environment

• ATM environment

• Cards and routing

• Payment cycle

• Basic S1 payments terminology

• EFT protocols

• Transaction integrity






guide.








be shown.


pipe symbol (on the

backslash key).


copyright date





slide belongs.








onto the slide and





• Electronic funds transfer (EFT)

• Card acceptor (merchant)

• Acquirer (merchant account provider)

• Card association (≈ EFT network)

• Issuer


Introduction

Terminology — 1






guide.








be shown.


pipe symbol (on the

backslash key).


copyright date





slide belongs.








onto the slide and





• Authorization and capture

• Downstream versus upstream

• On-us, not-on-us, remote on-us

• Protocol

• Primary account number (PAN)

• Bank identification number (BIN)


Introduction

Terminology — 2






guide.








be shown.


pipe symbol (on the

backslash key).


copyright date





slide belongs.








onto the slide and






Point-of-Sale Environment

Entities in a Point-of-Sale (POS) Environment

Merchant (or card acceptor)

Acquirer (or merchant Account provider)

Card association (or network)

Issuer Cardholder






guide.








be shown.


pipe symbol (on the

backslash key).


copyright date





slide belongs.








onto the slide and






ATM Environment

Entities in an ATM Environment

Card acceptor Acquirer Network Issuer Cardholder






guide.








be shown.


pipe symbol (on the

backslash key).


copyright date





slide belongs.








onto the slide and






ATM Environment

On-us Transactions

Issuer Issuer-owned ATM Cardholder






guide.








be shown.


pipe symbol (on the

backslash key).


copyright date





slide belongs.








onto the slide and






ATM Environment

Not-on-us Transactions

Acquirer Acquirer- owned ATM

Cardholder Network Issuer






guide.








be shown.


pipe symbol (on the

backslash key).


copyright date





slide belongs.








onto the slide and





• Routing

o Acquirer: on-us or not-on-us?

o Network: which issuer?

o Issuer: which account?

• Routing mechanism

o Primary Account Number (PAN)


Cards and Routing

Routing






guide.








be shown.


pipe symbol (on the

backslash key).


copyright date





slide belongs.








onto the slide and






Cards and Routing

Cards — PAN

• PAN — primary account number

• Usually 16 or 19 digits

PAN






guide.








be shown.


pipe symbol (on the

backslash key).


copyright date





slide belongs.








onto the slide and






Cards and Routing

Cards — BIN

• BIN — bank identification number

• First 6 digits

• Identifies card issuer

• Issued by card association or national standards body

BIN






guide.








be shown.


pipe symbol (on the

backslash key).


copyright date





slide belongs.








onto the slide and






Cards and Routing

Cards — IID

• IID — individual account ID

• Remaining digits (excluding the last digit)

IID






guide.








be shown.


pipe symbol (on the

backslash key).


copyright date





slide belongs.








onto the slide and






Cards and Routing

Cards — Check Digit

• Luhn formula (Modulus 10)

• Primarily of use in manual PAN entry

• Detects single-digit errors and transpositions of adjacent digits






guide.








be shown.


pipe symbol (on the

backslash key).


copyright date





slide belongs.








onto the slide and






Cards and Routing

Cards — Tracks

• Track 1 o Cardholder details (name and courtesy title)

o Used by terminals — not used by EFT processors

Track 1






guide.








be shown.


pipe symbol (on the

backslash key).


copyright date





slide belongs.








onto the slide and






Cards and Routing

Cards — Tracks

• Track 3 o Seldom used

Track 3






guide.








be shown.


pipe symbol (on the

backslash key).


copyright date





slide belongs.








onto the slide and






Cards and Routing

Cards — Tracks

• Track 2 o PAN + essential EFT data

o Numeric; Maximum 37 digits

Track 2






guide.








be shown.


pipe symbol (on the

backslash key).


copyright date





slide belongs.








onto the slide and





5412345678901234 = 0612 101


Cards and Routing

Cards — Track 2

PAN (max 19 digits)

Field separator

Expiry date (YYMM)

Service restriction code

Additional data (PVV/CVV)






guide.








be shown.


pipe symbol (on the

backslash key).


copyright date





slide belongs.








onto the slide and





• 2008 Global market share (in terms of purchase volumes)

o Visa – 60.25%

o MasterCard – 28.33%

o Amex – 10.04%

o JCB – 0.94%

o Diners – 0.44%

• 2008 Visa Transactions in US

o Purchase volume $823.7 billion (2003: $540 billion)

o Purchase transactions 9.2 billion (2003: 6.5 billion)


Cards and Routing

Credit Card Statistics






guide.








be shown.


pipe symbol (on the

backslash key).


copyright date





slide belongs.








onto the slide and





• Integrated circuit chip (ICC)

• Bigger storage capacity

• Perform cryptographic calculations

o Offline PIN verification

• Also known as EMV cards

o Europay

o MasterCard

o Visa


Cards and Routing

Chip Cards — 1






guide.








be shown.


pipe symbol (on the

backslash key).


copyright date





slide belongs.








onto the slide and





• Same basic information

o PAN

o Expiry date

o Service restriction code

• Supports the same routing mechanism as magnetic stripe cards

• Compatible with existing EFT network structure


Cards and Routing

Chip Cards — 2






guide.








be shown.


pipe symbol (on the

backslash key).


copyright date





slide belongs.








onto the slide and





• As of May 2008

o 622 million chip cards issued

o MasterCard: 310 million (¹⁄₅ of global portfolio)

o Visa: 262 million

o 8.2 million EMV acceptance points globally

o 68% of European POS points

o 56% of European ATMs


Cards and Routing

Chip Card Statistics






guide.








be shown.


pipe symbol (on the

backslash key).


copyright date





slide belongs.








onto the slide and





• How money (value) flows between EFT entities

• Two phases o Consumer

Value flows to the consumer.

Consumer receives cash or goods/services.

EFT processors (e.g. S1 payments system)

EFT protocols (ISO 8583)

o Settlement

Value flows from the consumer (closes the cycle)

Merchant or terminal owner receives payment

Automated clearing houses or similar


Payment Cycle

Introduction






guide.








be shown.


pipe symbol (on the

backslash key).


copyright date





slide belongs.








onto the slide and






Payment Cycle

Not-on-us ATM Transaction

Cardholder (Bank B)

Network

Request: Amount + surcharge 1: Cardholder’s

account debited

3: Amount + surcharge + interchange (switch) fee

2: Money dispensed

Card acceptor Acquirer (Bank A)

Issuer (Bank B)






guide.








be shown.


pipe symbol (on the

backslash key).


copyright date





slide belongs.








onto the slide and






Payment Cycle

Not-on-us POS Transaction

Cardholder (Bank B)

Merchant

Acquirer (Bank A)

Issuer (Bank B)

Request: Transaction amount

1: Cardholder’s account debited

4: Amount

2: Goods

5: Interchange

3: Amount – merchant fee (discount rate)

Network






guide.








be shown.


pipe symbol (on the

backslash key).


copyright date





slide belongs.








onto the slide and






Basic S1 Payments Terminology

Realtime and External Entities

Downstream Upstream Source interface Sink interface

Realtime Store server (source entity)

POS device Network (sink entity)

Issuer






guide.








be shown.


pipe symbol (on the

backslash key).


copyright date





slide belongs.








onto the slide and





• ISO 8583

o Most widely used EFT protocol

o Used by Realtime

• Specifies

o Message content

o Message Format

o Rules of exchange — draft capture protocols


EFT Protocols

ISO 8583






guide.








be shown.


pipe symbol (on the

backslash key).


copyright date





slide belongs.








onto the slide and





• Consumer phase — two components

o Authorization

Verifies cardholder has sufficient funds

Funds reservation

Adjusts available balance (not ledger balance)

o Capture

Cardholder’s account debited

Ledger balance adjusted

Transaction completed/secured


EFT Protocols

Draft Capture Protocols






guide.








be shown.


pipe symbol (on the

backslash key).


copyright date





slide belongs.








onto the slide and





• Four draft capture protocols (DCP)

o Paper

o Batch

o Store-and-forward

o Online


EFT Protocols

Draft Capture Protocols






guide.








be shown.


pipe symbol (on the

backslash key).


copyright date





slide belongs.








onto the slide and






EFT Protocols

Paper Draft Capture

Auth response

Auth request

Terminal Acquirer

End of day: File

Issuer






guide.








be shown.


pipe symbol (on the

backslash key).


copyright date





slide belongs.








onto the slide and





Advice responses


EFT Protocols

Batch Draft Capture

Merchant Acquirer Issuer

Batched advices

Auth response

Auth request

End of day






guide.








be shown.


pipe symbol (on the

backslash key).


copyright date





slide belongs.








onto the slide and






EFT Protocols

Store-and-Forward Draft Capture

Merchant Acquirer Issuer

Advice

Advice response

Auth response

Auth request

End of day






guide.








be shown.


pipe symbol (on the

backslash key).


copyright date





slide belongs.








onto the slide and






EFT Protocols

Online Draft Capture — Single Message Pair

ATM

Tran response

Tran request

Acquirer Issuer






guide.








be shown.


pipe symbol (on the

backslash key).


copyright date





slide belongs.








onto the slide and






EFT Protocols

Online Draft Capture — Dual Message Pair

Completion

Completion response ATM

Tran response

Tran request

Acquirer Issuer






guide.








be shown.


pipe symbol (on the

backslash key).


copyright date





slide belongs.








onto the slide and






EFT Protocols

Summary of Draft Capture Flows Paper Batch Store and

Forward Online

Tim

e

EOD






guide.








be shown.


pipe symbol (on the

backslash key).


copyright date





slide belongs.








onto the slide and





• Flexible message format

• Accommodates new requirements

• Multiple variants

• Protocol translation required between variants


EFT Protocols

ISO 8583 Messages






guide.








be shown.


pipe symbol (on the

backslash key).


copyright date





slide belongs.








onto the slide and






EFT Protocols

ISO 8583 Messages

0200 101100110101…

4 Bytes 8 (or 16) Bytes Variable length

Message type identifier

Bitmap

Data elements

MAC






guide.








be shown.


pipe symbol (on the

backslash key).


copyright date





slide belongs.








onto the slide and





Message class (first 2 digits)

• 01xx authorization

• 02xx transaction

• 03xx file update

• 04xx reversal

• 05xx reconciliation

• 06xx administration

• 08xx network management


EFT Protocols

Message Classes






guide.








be shown.


pipe symbol (on the

backslash key).


copyright date





slide belongs.








onto the slide and






EFT Protocols

Message Functions

Message function (last 2 digits)

• xx00 request

• xx20 advice

• xx02 completion

Add 10 for response

• xx10 request response

• xx30 advice response

• xx12 completion response

Add 1 for repeat

• xx21 advice repeat

• xx03 completion repeat

See page 1–23






guide.








be shown.


pipe symbol (on the

backslash key).


copyright date





slide belongs.








onto the slide and





• Real-time messages

o Cardholder waits for transaction to complete

e.g. transaction requests

o No response — time out

• Store-and-forward messages

o Transaction complete from cardholder’s point-of-view

e.g. advices, completions, and reversals

o No response — message repeated till response is received

o Inform recipient of final state of transaction

o Placed in S&F queue


EFT Protocols

Message Type Categories






guide.








be shown.


pipe symbol (on the

backslash key).


copyright date





slide belongs.








onto the slide and






EFT Protocols

Bitmaps

• String of bits (ones or zeros) indicating the presence or absence of data elements

• Each bitmap is 8 bytes (64 bits) long

• Bitmap 1 relates to fields 2–64

• Bit 1 of bitmap 1 indicates the presence/absence of bitmap 2

• Bit 2 indicates the presence of field 2, etc.

• Bitmap 2 relates to fields 65–128

10110010101…

1st bit indicates presence of bitmap 2

3rd bit Indicates presence of field 3, etc.






guide.








be shown.


pipe symbol (on the

backslash key).


copyright date





slide belongs.








onto the slide and





• Fields may be

o Fixed length (e.g. Field 3 — processing code)

o Variable length (e.g. Field 2 — PAN)

Length indicated by first 1–3 digits

o Numeric (e.g. Field 4 — tran amount)

o Alphanumeric (Field 45 — track 1 data)

o Mandatory (e.g. Field 7 — transmission date/time)

o Conditional (e.g. Field 35 — track 2 data)

o Optional (e.g. Field 28 — transaction fee)


EFT Protocols

Data Elements






guide.








be shown.


pipe symbol (on the

backslash key).


copyright date





slide belongs.








onto the slide and






EFT Protocols

Important Fields

Field number Description

2 Primary Account Number

3 Processing Code

4 Amount, Transaction

7 Transmission Date and Time

11 Systems Trace Audit Number

35 Track 2 data

39 Response Code

49 Currency Code, Transaction

52 Personal Identification Number (PIN) Data

127 Reserved for Private Use (S1-specific)






guide.








be shown.


pipe symbol (on the

backslash key).


copyright date





slide belongs.








onto the slide and





• Up to 999,999 bytes long

• Used extensively by Realtime

• Divided into subfields (2–39 sequentially)

• Bitmap indicates which subfields are present


EFT Protocols

Field 127

See page 1–28 for a list of more commonly used S1-specific subfields






guide.








be shown.


pipe symbol (on the

backslash key).


copyright date





slide belongs.








onto the slide and





• Customer’s view of a transaction = issuer’s view

• ISO 8583 ensures transaction integrity in two situations:

o Lost responses

o Protocol translation


Transaction Integrity

Introduction to Transaction Integrity






guide.








be shown.


pipe symbol (on the

backslash key).


copyright date





slide belongs.








onto the slide and





• Downstream EFT Entities are primarily responsible for recovery from failure upstream

o Comms failures en route to upstream entity

o Failure of upstream entity

o Comms failure affecting response message

• If failure occurs downstream, responsibility usually lies with the entity further downstream



Transaction Integrity: Lost Response






guide.








be shown.


pipe symbol (on the

backslash key).


copyright date





slide belongs.








onto the slide and







Upstream Failure

Online, no stand-in authorization

Downstream entity

Processor Upstream entity

0200

0210

0200

0420

0421

0430

Timed out

Timed out

0420 Declined






guide.








be shown.


pipe symbol (on the

backslash key).


copyright date





slide belongs.








onto the slide and







Upstream Failure

Downstream entity


Online, with stand-in processing

0200

0210

0200

0420

0220

0230

Timed out

0420 Approved

0430

0220






guide.








be shown.


pipe symbol (on the

backslash key).


copyright date





slide belongs.








onto the slide and







Late Response

Online, no stand-in authorization

Downstream entity


0200

0210

0200

0420

0430

Late rsp ignored

0420

Declined

Timed out

0210






guide.








be shown.


pipe symbol (on the

backslash key).


copyright date





slide belongs.








onto the slide and







Downstream Failure

Downstream entity


Online

0200

0210

0200

0420

0420

0430

Timed out

0420

0430

0210






guide.








be shown.


pipe symbol (on the

backslash key).


copyright date





slide belongs.








onto the slide and







EFT Protocol Translation — 1

Downstream entity


0200

0210

0100

0110

Online Store-and-forward

Potential loss of transaction integrity when performing protocol translation






guide.








be shown.


pipe symbol (on the

backslash key).


copyright date





slide belongs.








onto the slide and







EFT Protocol Translation — 2

Downstream entity


0200

0210

0100

0110

Online Store-and-forward

0220

0230

0220


Section 3: S1 Payments System Overview

• S1 payments product family

• S1 payments solutions






guide.








be shown.


pipe symbol (on the

backslash key).


copyright date





slide belongs.








onto the slide and





The S1 Payments Product Family


S1 Payments Product Family

Office Realtime

PostCard

Network Host

systems

File loads

File imports

Reconciliation files

File extracts

Reports

POS ATM Voice

Internet

File extracts

ACH

General ledger

eSocket.POS

eSocket.ATM

eSocket.web

Card production company






guide.








be shown.


pipe symbol (on the

backslash key).


copyright date





slide belongs.








onto the slide and





• Payments product family suited to several environments:

o Financial Institutions

o Retailers

o Telecom operators (mobile and fixed-line)

o Processors

o Networks

o Independent sales organizations (ISOs)



Business Environments






guide.








be shown.


pipe symbol (on the

backslash key).


copyright date





slide belongs.








onto the slide and





• Driving ATMs

• Performing card processing

• Authorizing transactions (stand-in and full authorization)

• Managing card production and PIN generation

• Driving point-of-sale devices

• Providing mobile and internet payment/banking

• Switching transactions



Business Solutions






guide.








be shown.


pipe symbol (on the

backslash key).


copyright date





slide belongs.








onto the slide and





• Core of installation

• Realtime manages o Online transaction processing

o Transaction security

o Integrity management

o Routing

o Card processing

o Currency conversion

o Batch reconciliation



Realtime






guide.








be shown.


pipe symbol (on the

backslash key).


copyright date





slide belongs.








onto the slide and





• Interact with external entities

• Provide protocol translation

• Provide terminal driving capability

o Source interfaces only

o AtmApp — Diebold and NCR ATMs

o TermApp — POS terminals



Realtime Interfaces






guide.








be shown.


pipe symbol (on the

backslash key).


copyright date





slide belongs.








onto the slide and





• Transaction querying

• Terminal monitoring

• Event logging

• Transaction tracing



Realtime Consoles






guide.








be shown.


pipe symbol (on the

backslash key).


copyright date





slide belongs.








onto the slide and





• Card management system

• Provides the following services to issuers

o Card production management

o PIN management

o Card activation

o Validation and authorization services

o Risk profile management

o Not an account management system



PostCard






guide.








be shown.


pipe symbol (on the

backslash key).


copyright date





slide belongs.








onto the slide and





• Transfers transaction data from Realtime to its own database

• Provides post-transaction processing: o Automatic reconciliation (match-and-kill)

o Extraction of transaction data

o Multi-party settlement including creation of payment (ACH) files

o Report generation



Office






guide.








be shown.


pipe symbol (on the

backslash key).


copyright date





slide belongs.








onto the slide and





• Provides easy integration of third-parties with the S1 payments system

• Components installed on “foreign” systems

• Web servers and IVR — eSocket.Web

• Web-enabled ATMs — eSocket.ATM

• POS devices — eSocket.POS

• Enables systems to

• Process EFT transactions (including EMV)

• Switch transactions to Realtime



eSocket






guide.








be shown.


pipe symbol (on the

backslash key).


copyright date





slide belongs.








onto the slide and





• ATM driving

• Retail payments

• Mobile prepay


S1 Payments Solutions

Example Payments Solutions






guide.








be shown.


pipe symbol (on the

backslash key).


copyright date





slide belongs.








onto the slide and





ATM Driving



Conventional ATMs: •Diebold 911/912 •Triton •Tranax •NCR NDC+ •Tidel

Advanced-function ATMs Pager alerts

Monitoring and configuration

Issuing banks

Reports

Office

Realtime

ATM processor’s payments system

Networks

WAN






guide.








be shown.


pipe symbol (on the

backslash key).


copyright date





slide belongs.








onto the slide and





Retail Payments



Pager alerts


Issuing banks

Reports

Networks

Retailer’s payments system

POS with eSocket.POS

Office

Realtime

WAN






guide.








be shown.


pipe symbol (on the

backslash key).


copyright date





slide belongs.








onto the slide and





Mobile Prepay



Mobile operator’s payments system

Pager alerts


Issuing banks

Reports

Prepay host

POS terminal

Mobile phone

Mobile Network

Office

Realtime

WAN

eft overview

Documents

slide title

eft overview copyright

eft overview module

participant guide

module title

copyright date

left corner

s1 global