Neeraj Singh

Card networks aim to enhance domestic card-not-present (CNP) (ecomm) tokenized transactions by making them faster, safer, and more secure. With tokenization, merchants processing transactions on credit cards no longer need to collect CVV for domestic online transactions initiated with tokenized credentials. CVV is only required during initial token provisioning. Once it is Tokenized, the Token along with the Cryptogram serves the purpose. 1/ Tokenized transactions use two factor authentication and encrypted tokens, replacing actual card details. 2/ They are secured with a Token Authentication Verification Value (TAVV) cryptogram for cardholder initiated payments. 3/ Since card networks (e.g., Visa, MasterCard, RuPay) do not transmit CVV to the issuing bank, it cannot be verified, and transactions proceed even if an incorrect CVV is entered. 4/ This approach reduces user friction and increases convenience, as CVV verification is deemed unnecessary for tokenized cards, given the enhanced...

  Image Courtesy:https://paytechlaw.com/ In my previous article, I have explained Step 1 i.e., Authorization. In this article, I am going to explain Step 2 – Batching, Step 3 – Clearing, Step 4 – Settlement. The Authorization process does not complete the transaction. After Authorization, the Merchant must request formally its Bank ( Acquiring Bank, the Bank that has provided the POS Machine to the Merchant ) to cover the fund for the sale. Now let us understand the further process. Step 2: Batching – In general words, the shopkeeper asks his bank that the POS Machine provided by you has x number of Authorized transaction and now you fund me for those. #1. The merchant stores all the day’s authorized sales in a batch. #2. The merchant sends this batch to the Acquirer to receive payments. The batch can be sent many times as per the agreement between Merchant and Acquiring Bank. Generally, it takes place at the end of Business Day.  Step 3: Clearing #1. The Acquirer B...

  Image Courtesy:https://paytechlaw.com/ Card Payments is a very vast domain and covering it through a blog becomes more challenging. This blog aims to give a high-level understanding of Card Payments in the most structured and organized way. Today world is moving at a great pace and hence stress would be laid in bestowing benefits to almost all groups influenced by Card Payments under professional and domestic growth. The topic will focus gradually on exploring the functionality and the mechanism behind this one of the most used methods of the payment system.   Participants Acquirer An Acquirer is a financial institution that processes transactions on behalf of a merchant. It holds the merchant's bank account and facilitates the acceptance of payment cards. Merchant A merchant refers to a business, either physical (Card Present) or online (Card Not Present), where a customer makes a purchase using a card issued by a financial institution (Issuer). The Point of Sale (POS) term...