Payment Cards

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Payment Cards

• Payment Cycle
• Introduction

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Card Payment Cycle
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Across The Payments Spectrum
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Supported card product types
Support issuance of Magnetic stripe and Chip
(VSDC/M/Chip) cards
Credit Revolving Charge Debit Corporate Pre-paid Instalments Affinity Cards Proxy / Virtual Cards (e-Card) Private label (profiled cards) Co-Branded Cards Payroll Cards Health Cards Remittance Cards Travel Cards Gift Cards Custom Electronic Purse
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• Credit Card Authorisation and Clearing System
  Flow

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Credit Card Authorisation and ClearingTypes

• 1. Local Card used in Counrty On-Line
• 2. Local Card used in Counrty On-Line- On-Us
• 3. Local Card used in Counrty Off-Line
• 4. Local Card used outside of Counrty - Method 1
• 5.Local Card used outside of Counrty - Method 2
• 6. Foreign Card used in Counrty Method 1
• 7.Foreign Card used in Counrty Method 2

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BKM Switch System
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Credit Card On-Line Authorisation
Local Cardused in Turkey
BKM A.S.
Approve/Reject
Approve/Reject
Card Holder
Merchant
Approve/Reject
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Credit Card of B Bank
POS machine of A Bank
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Authorisation if Issuing Bank can not respond to
BKM query
Local Cardused in Turkey
BKM A.S.
Approve/Reject
Based on Predetermined Limits Approved by Issuing
Bank to be used in case of lack of communication
of BKMwith the acquiring bank Approve/Reject
Merchant
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ISYERI
Credit Card of B Bank
POS machine of B Bank
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On-Us Transactions
Local Cardused in Turkey
Credit Card of A Bank
Approve/Reject
POS machine of A Bank
Merchant
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Card Holder
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Issuing Bank routes it first toBKM andBKM routes
it to Visa or MasterCardMethod 1
Local Cardused outside of Turkey
VISA/MC
BKM A.S.
Approve/Reject
Approve/Reject
Approve/Reject
InternationalAuthorisation Process is executed
Local Card Holder
BKM can only handle the Authorisation. Cleaing
and Settlement should be done with VISA and
MasterCard
Approve/Reject
Foreign Merchant
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Issuing Bank routes it directly to Visa or
MasterCardMethod 2
Local Cardused outside of Turkey
VISA/MC
Approve/Reject
Approve/Reject
InternationalAuthorisation Process is executed
Local Card Holder
Approve/Reject
Foreign Merchant
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If Issuing Bank is not a Local Bank the Acquiring
Bank routes it first toBKM andBKM routes it to
Visa or MasterCardMethod 1
Foreign Cardused in Turkey
VISA/MC
BKM A.S.
Approve/Reject
Approve/Reject
Approve/Reject
Merchant
Approve/Reject
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ISYERI
Credit Card of a Foreign Bank
POS machine of A Bank
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If Issuing Bank is not a Local BankAcquiring
Bank routes it directly to Visa or
MasterCardMethod 2
Foreign Cardused in Turkey
VISA/MC
Approve/Reject
Approve/Reject
Merchant
Approve/Reject
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Credit Card of a Foreign Bank
POS machine of A Bank
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Domestic Reconciliation/Settlement
BKM
B BANK
A BANK
Central Bank
TCMB
BKM HESABI
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CARD HOLDER
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Debit Card Online POS Authorisation
Flow(Domestic International)
International Authorisation
Visa/MasterCard International Purchase
International Authorisation
Payment Schemes MasterCard Visa
Cardholder
Merchant
Acquirer
Domestic Purchase
Domestic Authorisation(BKM ISO8583 format)
International Authorisation
International Authorisation
BKM
International Authorisation (BKM ISO8583 format)
Domestic Authorisation(BKM ISO8583 format)
Issuer (Authorisation Institute)
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Debit Card Online Clearing Settlement Flow
(Domestic)
Domestic Clearing (BKM format)
Domestic Purchase
Cardholder
Merchant
Acquirer
Net Settlement
Domestic Clearing (BKM format)
BKM
Domestic Clearing (BKM format)
Net Settlement
Central Bank
Issuer
Net Settlement
All Acquirers Issuers including BKM have
Clearing Bank accounts within the Central Bank,
therefore funds simply transfer between accounts.
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Secure e-Payment Infrastructure
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Future of Payments

• Further erosion into cash and other non card
  payments
• Need to ensure balance between parties to foster
  growth
• Risk will continue to be major concern
• Regulators will continue to oversee
• New technologies and channels
• Mobile
• Voice
• Contactless
• E-payment
• Maximisation of the chip on the card