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Chapter 8 - An A to Z for the Processing World

Transitioning to the card payments industry is often a two-edged sword: potentially a financially rewarding endeavor, yet often difficult for the sales professional new to an unfamiliar industry. This program is designed to assist both new and seasoned veterans attain true financial success by employing a simple and effective sales process.

A BRIEF HISTORY OF PAYMENT PROCESSING

To understand where we are going it’s helpful to know where you came from. Developing an understanding of the history behind the payment industry will provide a framework for understanding future changes.

ASSOCIATIONS, ACQUIRERS, AND ISSUERS

We will split the processing industry into its component parts - the companies who provide the actual services and those who manage the sales aspects. Associations, and the constituent banks who perform the issuing and acquiring services, will be discussed in detail.

THIRD PARTY PROCESSORS, ISO'S AND MSP’S

The companies who manage the lion share of selling to the merchants are covered under the umbrella of third party processors, ISO and MSP providers. Most agents will find that they will be dealing with these companies as a resource from which processing services will be provided.

iPROCESS - Knowing the Industry

Chapter 8 - ‘Payment Processing Basics - Then and Now’

“Two sure ways to fail - think and never do or do and never think.”

-Zig Ziglar

Associations, Acquirers, and Issuers

Today, the payment industry can be ‘split’ into roughly two groups – the businesses that constitute the engine behind our modern payments industry, and complementary business whose primary focus is to sell these services to the merchants (those businesses who accept credit cards).

Let’s look at our first group.

Associations

There are many associations within the payment industry, yet non-so powerful as the two largest bankcard associations: Visa and MasterCard.

These associations are made up of literally several thousands of financial institutions. These financial institutions are referred to as ‘member banks’. The association maintains a governing role in the establishment of rules and regulations, which govern the activities of its member constituents.

Specifically:

  • Product development and advertising*
  • Establish, review, and enforce governing rules impacting the various aspects of the payment product
    • Interchange
    • Procedures
    • Clearing and Settlement

*Additional services and functions occur as well at the association level which are not discussed in this section.

Acquirers

Acquiring: The act of collecting sales activities and crediting the merchant ‘monies due’ as a result of a card purchase This term refers to the actions of a member bank collecting sales activities from the merchant and crediting the merchant for the sales activities. Acquirers are contractually bound to the merchant, and it is the acquirer who conducts the majority of the settlement activity ....

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