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If we start to analyze all the processes involved in the simple act of inserting the card into a machine and entering a password, it is noticeable how complex it can be. The way in which the agents in this chain operate and communicate is highly sophisticated. In this article we will explain how the payment industry operates and how it impacts on different businesses.
Un-Complicating the Payment Industry
There are some agents that make up the means of payment companies and guarantee their full functioning. Check out each one below. So you need to check how to become a registered iso of Wells Fargo also.
What Are Flags?
You have probably heard this term several times and you can certainly see the most famous credit card brands on the market. The Central Bank defined, in the so-called “Industry Regulatory Framework”, that the payment market needs an agent that determines and manages the general rules of an electronic payment transaction.
The flags perform this function, dictating the operation of the card payment system, and are also responsible for certifying the solutions for capturing transactions (the software that runs on a machine, for example).
What is an acquirer (or accreditation?)
The buyers are responsible for accrediting stores, restaurants and other establishments to accept cards as payment, but also are in charge of:
- Capture transactions;
- Transmit the data to the flags (card number, for example);
- Process and settle financial transactions for the account of receipt of accredited establishments.
What is a facilitator (or sub-acquirer / sub-accreditor?)
Facilitators, also called sub-acquirers or sub-accreditors, use the acquirers to mediate payments between all parties involved, transmitting the data to the acquirers and settling on the tenants’ account. Facilitators are an extension of acquirers and are widely used in smaller establishments and niche businesses, as they are able to offer more customized services.
What is emitter?
This is probably the most popular term when it comes to the payment industry. Issuers hold the license of the brands to issue cards, offer credit and set limits for cardholders. They are also responsible for the validation and release of the cardholder to carry out transactions. They issue cards and release limits to users. In addition, they approve of the amount of credit to be used by their consumer.
Generally, card issuers are banks that already have customer financial data. However, there are cases in Brazil and in the world of business model startups based on the issuance of pre and post-paid cards and which do not necessarily have a license to act as a financial institution.
How Does Online Payment Confirmation Work?
When we talk about digital payments, the figure of the gateway comes into play, connecting virtual stores to payment companies. And, just as it works with a face- to- face payment service, the gateway captures the transaction data for the acquirer, who in turn communicates with the flag and the card issuer to approve the transaction.
The issuer is responsible for releasing the holder credit limit. In a transaction, this means that the issuer validates whether or not the user has a credit limit on the card for approval of the purchase. Then, the issuer sends the “agreement” to the acquirer. This happens systematically, in fractions of a second.