OUR
INDUSTRY
Bankcard Associations
The term “bankcards” refer to
credit card issuing and credit card acceptance
(AKA Acquiring) as governed by Visa and
MasterCard through the banking network system.
These two entities provide memberships to
financial institutions, who in turn, offer
these services to consumers desiring an
open-ended credit limit to purchase goods
and/or services, and merchants wanting to
accept credit cards presented by cardholders.
Hence, for a credit card transaction to
occur a consumer must present the Visa or
MasterCard brand and a business must accept
it as a form of payment. It is important
to note that consumers or merchants don’t
go to Visa or MasterCard to obtain either
of these services. Rather, they contact
a member bank.
Where does Card
One fit into the mix? Both Visa and MasterCard
authorize financial institutions to empower
Independent Sales Organizations (a term
used by Visa) or Merchant Service Providers
(a term used by MasterCard), like Card One
International, to act as intermediaries
on behalf of member banks, but under specific
guidelines. Card One is a full-service banking
operations that provides merchant sales,
underwriting, customer service, technical
support, chargebacks & retrievals, and
risk management, but under the bank umbrella.
Travel &
Entertainment Card Associations (T &
E’s)
T & E Providers such as American Express,
Discover Card, and Diners Club, operate
similarly to Bankcard Associations, except
that they function independent from the
banking network system. Hence, all issuing
and acquiring is donein-house. However,
T & E’s have created streamlined
programs, for banks and independent card
processors like Card One International,
and make available their brands subsequent
to the Visa and MasterCard sign-up. Specific
facts merchants should know:
- Card One International
has no control over T & E service
levels or pricing
- Their approval
process normally takes about 10-days
- Discount rates
are traditionally higher than bankcards
- Each brand provides
separate monthly statements
- Each offers
a help desk specific to their brand
Network Processors
Bank issuers rely on network processors
(Mainframe System Providers) to warehouse
cardholder data and guarantee that funds
are available at the Point of Sale. Also,
they facilitate electronic funds transfer
from issuing bank (cardholder account) to
the merchant bank account.
Bank Acquirers
too rely on processing networks to route
cardholder transactions needing approval,
and they initiate the clearing and settlement
of funds.
The entire process
works similarly to check processing. The
numbering system on the bottom of a check
has a routing number (bank ID) and an account
number (accountholder ID). The numbering
system on the Visa Card or MasterCard indicates
the cardholder’s bank and account
number. Subsequently, each merchant set
up to accept credit cards receives a Bank
Identification Number (BIN) and Merchant
Identification Number (MID) to identify
the acquirer and merchant. These two numbering
schemes are programmed into a merchant’s
Point-of-Sale terminal.
POS Equipment
and Supply Providers
Many POS hardware terminals exist on the
market today. Also, there are a myriad of
POS supplies needed by merchants (e.g.,
printer rolls, sales drafts, ink cartridges,
etc.). The fulfillment of POS equipment
and supplies are handled by providers specific
to the industry.
POS Equipment
Leasing
Merchants needing POS hardware terminals
can opt to lease the equipment. Terms and
conditions vary among each provider. Leasing
POS equipment is mostly beneficial to those
merchants wanting to pay the initial cost
over time. It is important to note that
Card One International is independent from
these providers and cannot control costs
or service levels. |
