it is a lot more complicated than that.
the merchant has a relationship with a mechant bank/acquier. the merchant
sends transactions to the merchant bank/acquier. The merchant bank/acquier
sends the transactions to the issuering bank. The merchant bank
approves/disapproves the transaction and sends the response.
Usually sometime that night, the merchant bank/acquier does a batch
financial transaction to each issueing bank that has any money to be sent
to any merchant at that merchant bank. This is via one (or more) of the
wholesale settlement systems. Basically there can be a single wholesale
funds transfer from each issuing bank to that specific acquiring bank. The
acquiring bank then aggregates all incoming funds and then credits the
appropriate amounts to each merchant account.
The wholesale settlement networks are used to do bank-to-bank financial
transfers for a number of reasons, ACH (aka check), ATM (debit), credit
card, wire transfer, etc. In the case of credit card transfers, the
acquiring bank has the mapping between the merchant credit identifier and
the merchant bank account number. If a customer knew the merchant bank
account number ... they could execute a ACH push ... either via a check or
other means to that account. The problem is how to reconcile a financial
deposit in the merchant account with a specific customer/merchant
transaction. Various of the EDI 8xx transactions have addressed some of
this ... merchant gets a bulk financial transaction with an ACH addenda
record listing the itemized details of individual accounts. An example
might be electronic payments to utility company. Given that the utility
company had setup the appropriate EDI mechanism ... they could get a single
bulk transfer for the amount transferred for that day ... with EDI ACH
addenda record giving the individual account numbers and amounts involved
in the transaction.
Some of the supply-chain management infrastructures associated with
purchase cards send detailed "credit card statement" to the corporation
electronically in EDI addenda record format so that the corporation can
reconcile billing with transactions.
When the merchant is initiating essentially a "pull" transaction ... it is
easier for the merchant to correlate the payment with specific customer
transaction. For a customer initiated "push" transaction (say via ACH push)
.... the conventions aren't all in place so that it is easy for a merchant
to correlate a received payment with a specific transaction (the various
EDI applications that support pushed ACH payments aren't really a consumer
product). Just doing the money transfer isn't sufficient ... the merchant
has to additioinally have the information that correlates specific payment
amount with specific transaction, purchase order, etc
Customers push monthly payments to all sorts of merchants ... but they
typically have a pre-established account at that merchant ... and the
incoming check includes the customer's account number statement for that
merchant. There is big business in payment drop-boxes where a 3rd party
outsourcer handles all the incoming checks and statements. They may
generate a single large EDI ACH addenda record with line item detail for
the account numbers, possibly names, and amounts for each individual
account ... so the merchant can reconcile accounts receivable information.
In some cases, some of the banking electronic payments system are banks
directly offering the service of some of the drop-box operators.
Anders Rundgren
<anders.rundgren@ To: internet-payments
telia.com> <[EMAIL PROTECTED]>
cc:
04/19/2002 04:28 Subject: Basic credit-card payment
AM question
The common way to perform credit-card transactions is that the
merchant initiates the payment with the help of the customers' card (data).
Do credit-card enabled merchants have any possible way to receive
money through the credit-card networks through an off-line
operation performed by the customer though his/her issuer?
I.e. an account-to-account transaction run in the other direction?
That would be terrific!
Anders
