How To Understand And Understand The Bank Account In European Credit Card Transactions

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1 Title Page CyberSource Global Payment Service Planning Guide December 2014 CyberSource Corporation HQ P.O. Box 8999 San Francisco, CA Phone:

2 CyberSource Contact Information For general information about our company, products, and services, go to For sales questions about any CyberSource Service, or call or (toll free in the United States). For support information about any CyberSource Service, visit the Support Center at Copyright 2014 CyberSource Corporation. All rights reserved. CyberSource Corporation ("CyberSource") furnishes this document and the software described in this document under the applicable agreement between the reader of this document ("You") and CyberSource ("Agreement"). You may use this document and/or software only in accordance with the terms of the Agreement. Except as expressly set forth in the Agreement, the information contained in this document is subject to change without notice and therefore should not be interpreted in any way as a guarantee or warranty by CyberSource. CyberSource assumes no responsibility or liability for any errors that may appear in this document. The copyrighted software that accompanies this document is licensed to You for use only in strict accordance with the Agreement. You should read the Agreement carefully before using the software. Except as permitted by the Agreement, You may not reproduce any part of this document, store this document in a retrieval system, or transmit this document, in any form or by any means, electronic, mechanical, recording, or otherwise, without the prior written consent of CyberSource. Restricted Rights Legends For Government or defense agencies. Use, duplication, or disclosure by the Government or defense agencies is subject to restrictions as set forth the Rights in Technical Data and Computer Software clause at DFARS and in similar clauses in the FAR and NASA FAR Supplement. For civilian agencies. Use, reproduction, or disclosure is subject to restrictions set forth in subparagraphs (a) through (d) of the Commercial Computer Software Restricted Rights clause at and the limitations set forth in CyberSource Corporation's standard commercial agreement for this software. Unpublished rights reserved under the copyright laws of the United States. Trademarks CyberSource, The Power of Payment, CyberSource Payment Manager, CyberSource Risk Manager, CyberSource Decision Manager, CyberSource Connect, Authorize.Net, and echeck.net are trademarks and/or service marks of CyberSource Corporation. All other brands and product names are trademarks or registered trademarks of their respective owners. 2

3 Contents CONTENTS Recent Revisions to This Document 7 About This Guide 8 Audience 8 Purpose 8 Conventions 8 Note, Important, and Warning Statements 8 Text and Command Conventions 9 Related Documents 9 Customer Support 9 Chapter 1 Payment Types 10 Bank Transfers 10 Direct Debits 10 Bank Cards 11 Global Bank Cards 12 Regional and Country-Specific Bank Cards 13 Risk Types 14 Compliance 14 Merchant Account Descriptor Requirements 14 Excessive Credit Card Chargebacks or Excessive Direct Debit Returned Items 15 Merchant Remittance Funding 15 Dormant and Closed Accounts 15 Chapter 2 Business Implementation 16 Countries and Currencies 16 Selecting Countries 16 Selecting Currencies 16 Global Payment Service Planning Guide December

4 Contents Planning Your Business Implementation 17 Contacting Your Account Representative 17 Providing Company Information 17 Signing the Merchant Agreement 17 Creating a Reserve Account 18 Opening Your CyberSource Account and Completing the Intake Process 18 Closing Your CyberSource Account 18 Chapter 3 Transaction Life Cycle 19 Transactions and Events 19 Transaction Life Cycle 20 Order Tracking 21 Merchant Reference Code 22 Transaction Reference Number (Reconciliation ID) 22 Request ID 23 Payment Reference Number 23 Forwarding the Transaction to the Processor 23 Fulfilling the Order 24 Expected Payment Receipt Times 25 Exceptions 26 Funding 26 Timing of Funding 27 Funding Exceptions 27 Request IDs and Request Tokens 27 Financial Reconciliation 28 Financial Reports 28 Collection Report 28 Remittance Report 29 Report Schedule 29 Order Reconciliation 30 Payment Submission Detail Report 30 Payment Events Report 31 Chapter 4 Technical Implementation 33 Guidelines for Displaying Bank Information 33 Testing 33 Global Payment Service Planning Guide December

5 Contents Chapter 5 Bank Transfers and Bank Transfer Refunds 35 Bank Transfers 35 Flow of Identifiers for Order Tracking for Bank Transfers 36 Transaction Status Changes 37 Payment Confirmation and Shipping the Goods 37 Design Considerations 38 Web Site Modifications 39 Missing Bank Transfer Payments 41 Bank Transfer Refunds 42 Types of Refunds 42 Requesting a Follow-on Refund 43 Flow of Identifiers for Order Tracking for Bank Transfer Refunds 43 Transaction Status Changes 44 Reconciling a Refund 45 Chapter 6 Real-Time Bank Transfers 46 Benefits of Real-Time Bank Transfers 46 Customer Experience 47 Transaction Flow 48 Flow of Identifiers for Order Tracking 49 Payment Confirmation and Shipping Goods 50 Enrolling for the Service 50 Chapter 7 Boleto Bancário Payments 51 Overview of Boleto Bancário Processing 51 Requirements 53 Business Requirements 53 Web Site Requirements 54 Technical Requirements 54 Expiration Date Requirements 55 Limitations 55 Information About Your Transactions 55 Reply Messages 55 Reports 56 Query for a Single Transaction 56 Transaction Details 57 Abandoned Boletos Bancários 57 Payment Discrepancies 57 Global Payment Service Planning Guide December

6 Contents Chapter 8 Direct Debits and Direct Debit Refunds 58 Direct Debits 58 Flow of Identifiers for Order Tracking for Direct Debits 59 Payment Confirmation and Shipping Goods 60 Direct Debit Reversals 61 Using Chargebacks and Banking Reversal Codes for Reconciliation 61 Design Considerations 63 Web Site Modifications 63 Direct Debit Refunds 63 Types of Refunds 64 Requesting a Follow-on Refund 64 Flow of Identifiers for Order Tracking for Direct Debit Refunds 64 Transaction Status Changes 66 Reconciling a Refund 66 Chapter 9 Bank Cards 67 Bank Card Types 67 Online and Offline Processing 68 Online Bank Card Flow 68 Offline Bank Card Flow 69 Reconciliation 71 Bank Card Refunds 71 Web Site Modifications 71 API for Bank Card Implementation 71 Appendix A Reason Codes 72 Reason Codes for the Simple Order API 72 Appendix B Researching a Missing Bank Transfer Payment 75 Index 78 Global Payment Service Planning Guide December

7 Recent Revisions to This Document REVISIONS Release December 2014 September 2013 February 2013 November 2012 Changes Removed requirement to send request token fields with follow-on bank transfer and direct debit refunds. See the following sections: Bank transfers: "Requesting a Follow-on Refund," page 43 and "Flow of Identifiers for Order Tracking for Bank Transfer Refunds," page 43 Direct debits: "Requesting a Follow-on Refund," page 64 and "Flow of Identifiers for Order Tracking for Direct Debit Refunds," page 64 This revision contains only editorial changes and no technical updates. This revision contains only editorial changes and no technical updates. This revision contains only editorial changes and no technical updates. November 2011 Removed all CyberSource processor information. Removed Chapter 9, Direct Debits in the United Kingdom. This functionality is not supported. Global Payment Service Planning Guide December

8 About This Guide ABOUT GUIDE Audience This guide is written for merchants who want to use the Global Collect processor to offer the Global Payment services to customers. Purpose This guide describes the business and technical implementations a merchant must complete in order to make bank transfers and bank transfer refunds, real-time bank transfers, boleto bancario payments, and direct debits and direct debit refunds. Conventions Note, Important, and Warning Statements Note A Note contains helpful suggestions or references to material not contained in the document. Important An Important statement contains information essential to successfully completing a task or learning a concept. Warning A Warning contains information or instructions, which, if not heeded, can result in a security risk, irreversible loss of data, or significant cost in time or revenue or both. Global Payment Service Planning Guide December

9 About This Guide Text and Command Conventions Convention Usage bold Field and service names in text; for example: Include the ics_applications field. Items that you are instructed to act upon; for example: Click Save. monospace XML elements. Code examples and samples. Text that you enter in an API environment; for example: Set the davservice_run field to true. Related Documents The Global Payment Service Developer Guide (PDF HTML) describes the tasks a merchant must complete in order to make bank transfers and bank transfer refunds, real-time bank transfers, boleto bancario payments, and direct debits and direct debit refunds. Credit Card Services Using the Simple Order API (PDF HTML) describes the tasks you must complete to integrate the credit card services into your existing management system. Credit Card Services Using the SCMP API (PDF HTML) describes the tasks you must complete to integrate the credit card services into your existing order management system. Getting Started with CyberSource Advanced for the Simple Order API (PDF HTML) describes how to get started using the Simple Order API. Getting Started with CyberSource Advanced for the SCMP API (PDF HTML) describes how to get started using the SCMP API. The Reporting Developer Guide (PDF HTML) describes how to download reports. Refer to the Support Center for complete CyberSource technical documentation: Customer Support For support information about any CyberSource service, visit the Support Center at: Global Payment Service Planning Guide December

10 Payment Types CHAPTER 1 Bank Transfers Bank transfers (giros) provide customers with the bank account information for a local payment-receipt bank account that CyberSource provides. Customers instruct their banks to transfer money into this account. After payment is received CyberSource funds your merchant bank account. CyberSource supports bank transfers in many countries. Contact your CyberSource sales representative for the most up to date list. Bank transfers have virtually no consumer dispute rights because the customer initiates the movement of funds. Fraud risk is also low because of the high level of customer identification required by the bank to initiate a bank transfer. However, you do have credit risk until settlement or the risk that the customer might reconsider the purchase and choose not to pay. Accordingly, it is customary to delay shipping until you receive payment confirmation. For more details about how bank transfers work, see Chapter 5, "Bank Transfers and Bank Transfer Refunds," on page 35. Direct Debits Customers provide their bank account information and authorize you to transfer money out of their accounts. Direct debits are used for domestic fund transfers only, so CyberSource provides you with a local payment-receipt bank account. When payment is received into the account CyberSource funds your merchant bank account. Direct debits are similar to electronic checks used in the U.S. Global Payment Service Planning Guide December

11 Chapter 1 Payment Types CyberSource supports direct debits in Austria, Germany, the Netherlands, and Spain. Note Direct debit is a general term for the payment type that is used throughout the documentation. Direct debits can be called by other names, depending on the country. For example, in Germany, one of the large direct debit systems is called ELV, which stands for Elektronisches Lastschrift Verfahren and means electronic debit method. A mandate is a signature or another form of permission that you obtain to transfer funds from the customers account. In specific countries the customers bank requires a mandate to process a direct debit. Other banks may require a mandate if you want to dispute reversals. Contact Cybersource Customer Support for requirements related to mandates in the supported direct debit countries. Direct debits are subject to extensive dispute rights and high dispute fees. You should research the rules as a part of your due diligence process because rules differ per country. Direct debit payments are also subject to fraud risk because there is low identification or authentication required to initiate a direct debit. These payments are also subject to customer credit risk because there is no initial authorization that verifies whether the bank account has sufficient funds. It is customary to delay shipping until you receive payment confirmation. For information about how direct debits work, see Chapter 8, "Direct Debits and Direct Debit Refunds," on page 58. Bank Cards Each of the Global Payment Service payment types and bank cards is classified as either online or offline. Bank Cards can be either global or local. Online when you submit an order, you receive an immediate confirmation about the availability of the funds. Most of the common global bank cards are processed online. For online payment types, you typically start the process of order fulfillment soon after you receive confirmation of the order. Offline you submit an order you do not know if the funds are available until you receive confirmation of the payment. You should not ship the goods until you receive this payment confirmation. Offline bank cards take typically five days longer than online cards to process and for you to receive payment confirmation. Bank transfers the processing time is difficult to estimate because the time depends on the customer and the banking system. However, 2 weeks is customary. Direct debits the processing time is typically 2 or 3 days. Global Payment Service Planning Guide December

12 Chapter 1 Payment Types Online Payment Types American Express Carta Si Italian Visa-branded or MasterCard branded in-country bank card Carte Bleue French Visa-branded or MasterCard-branded in-country bank card; for this card your capture requests must be for 0.99 euros or more Dankort Danish Visa-branded in-country bank card Delta U.K. Visa debit card Electron European Visa debit card Eurocard Regional brand of MasterCard JCB Laser Irish Visa-branded in-country bank card MasterCard Maestro U.K. in-country bank card Visa Offline Payment Types Bank Transfer sometimes called giro Diners Club Direct Debit Global Bank Cards Global bank cards are cards that are accepted worldwide: American Express Diners Club JCB MasterCard Visa You might already have implemented one of these global bank cards through a different payment processor that might not have multi-currency processing for support of international payment. You might want to consider implementing support for these cards through the Global Payment Service for the following reasons: Multi-currency processing: Customers can pay in their local currency. Contact your CyberSource Customer Support representative to find out what currencies are supported. Single set of reports for all transaction activities originating in a certain country. You do not have to move your existing domestic bank card processing away from your current processor. However, if you want to use the Global Payment Service and are already processing international payments through another processor, you will need to switch those transactions to be processed with the Global Payment Service. Global Payment Service Planning Guide December

13 Chapter 1 Payment Types Except for Diners Club, global bank cards are authorized and settled online, resulting in low credit risk to you. Because Diners Club is an offline card outside of the U.S., you do not receive an immediate online authorization and bear significant credit risk for this card. For information about offline processing, see "Bank Cards," page 11, and "Offline Bank Card Flow," page 69. With the global bank cards, customers have limited dispute rights. You bear fraud risk for global bank cards with the exception of Visa and MasterCard transactions that are covered by Payer Authentication. For information about global bank cards, see Chapter 9, "Bank Cards," on page 67. Regional and Country-Specific Bank Cards Although global bank cards are extensively used in Australia, Canada, and the U.S., many European customers prefer instead to use regional or country-specific bank cards. Even though customers can choose to pay with a global bank card, by showing that you support local bank cards, you can improve your store presence and sales. These regional cards use payment networks other than those of global bank cards, but processing is similar to global cards. The Global Payment Service allows you to accept the following country-specific and regional bank cards: Carte Bleue French Visa branded or MasterCard branded bank card. Using this card your capture requests must be for 0.99 euros or more Carta Si Italian Visa branded or MasterCard-branded in-country bank card Dankort Danish Visa branded in-country bank card Delta U.K. Visa debit card Electron European Visa debit card Eurocard Regional brand of MasterCard Laser Irish Visa-branded bank card Maestro U.K. bank card Country specific bank cards are subject to chargeback rules, and you bear fraud risk. Because consumer dispute rules differ by country, you should thoroughly research the rules as a part of your due diligence processes. Some of the above cards use online authorizations, while others do not and are considered offline cards. The credit risk for online cards is considered low because you receive an authorization from the customer's bank. Offline cards have significant credit risk because you do not receive an immediate online authorization. Accordingly, it is customary to delay shipping physical goods until you receive payment confirmation for these cards. For more information, see "Bank Cards," page 11. Global Payment Service Planning Guide December

14 Chapter 1 Payment Types Risk Types With each type of payment comes a certain amount and type of risk: Credit risk the customer does not have the required funds in the account to cover the payment. To avoid credit risk, do not ship the goods until the payment has been confirmed. Fraud risk an unauthorized person is using the bank account or bank card. Consumer dispute rights the customer disputes a charge against the bank account or bank card. You may be required to return the amount of the disputed charge to the customer s account. Disputes can create both administrative and financial costs for you. Compliance Accepting payments from a country other than your own requires that you observe the processing rules and practices of the payment systems in those countries. The following two sections outline areas of compliance which have particular focus. In addition to these two sections, other sections in this guide describe operational requirements that you must follow to be compliant. Merchant Account Descriptor Requirements The merchant account descriptor is a fixed text field that is associated with either a merchant credit card account or merchant direct debit services. The purpose of the descriptor is to communicate merchant name information to the customer so that they can be reminded of the circumstances that triggered the payment. Clearly stated, merchant descriptors reduce the possibility of a credit card chargeback or a returned direct debit, which is similar to a credit card chargeback. Accordingly, the merchant descriptor displayed on the customers statement should be a close match to the name on your Web site. It is not good practice to consolidate multiple Web sites into a single direct debit account or credit card account and use a generic descriptor that more-or-less covers all offerings. Global Payment Service Planning Guide December

15 Chapter 1 Payment Types Excessive Credit Card Chargebacks or Excessive Direct Debit Returned Items You are responsible for maintaining good customer support, rapid problem resolution, a high level of customer satisfaction, and transaction management processes that minimize account takeover fraudulent transactions. All of these are required to prevent an excessive number of credit card chargebacks or an excessive number of returned direct debits. In the event that credit card chargebacks or direct debit returned items become excessive, CyberSource may require you to undertake business process changes to reduce chargebacks and/or returned items. In the event that the chargebacks and/or returned items are not reduced to a satisfactory level, CyberSource may terminate the account. Merchant Remittance Funding In conjunction with the processing of global payment transactions, you can request that CyberSource convert transaction proceeds to a currency other than the currency in which the transaction took place for funding into an operating account. The process of currency conversion involves a foreign exchange rate to determine how much the transaction currency is worth in terms of the funding currency. The foreign exchange rate may be explicitly stated as a rate or implicitly stated as a transaction amount and a funded amount and may vary from day to day. The foreign exchange rate may also include a mark-up to cover the foreign exchange risk, sales commissions, and handling costs. Dormant and Closed Accounts In the event that a refund, credit, chargeback and/or direct debit return exceeds the available balance in your account, CyberSource may terminate your ability to process any further transactions. Global Payment Service Planning Guide December

16 Business Implementation CHAPTER 2 Countries and Currencies Selecting Countries You can process global payments in many countries. Contact your CyberSource account representative for the current list. If you want to add any payment types, contact your CyberSource Technical Account Manager. CyberSource will provide you with pricing information and may need to collect additional information from you. Selecting Currencies With payments such as bank transfers and direct debits have currency restrictions: All the payments that originate from a particular country must be funded with a single currency and into a single bank account. During the intake process, you must inform CyberSource of the funding currency that you want to use for each processing currency. You will have a separate bank account for each funding currency, and you must provide CyberSource with detailed information of each funding bank account you use. Global Payment Service Planning Guide December

17 Chapter 2 Business Implementation Planning Your Business Implementation Contacting Your Account Representative Contact your account representative to discuss your basic business needs: Payment types you want to accept Countries where you want to do business Currencies that you want to use to process payments and receive funds CyberSource can recommend payment types to accept based on your business model and the countries where you want to do business. Based on this information, CyberSource quotes a price for services. Providing Company Information When you accept the quote you must provide information about your company, the company s financial status, and your projected transaction volumes, by payment type and country. Based on this information CyberSource assesses the risk of underwriting your account. The assessment takes approximately 2 weeks to complete. In this relationship CyberSource is the merchant account provider and bears the ultimate risk of any chargebacks, reversals or returns. Signing the Merchant Agreement If CyberSource accepts the risk of underwriting your account, CyberSource supplies a merchant agreement. All business arrangements, including the terms and conditions relating to the reserve account, are identified in the agreement. The agreement is organized according to the payment types and the countries involved. As part of the agreement you are required to read this guide so that you understand the implications and requirements of the payment types and countries. Global Payment Service Planning Guide December

18 Chapter 2 Business Implementation Creating a Reserve Account As part of the agreement, you might be required to create a reserve account that covers chargebacks and credits in the event that your organization is unable to meet these obligations. The amount and type of reserve can vary depending on the payment type and other variables: A rolling 6-month reserve each month CyberSource collects typically 5% 15% of your sales activity for that month. At the end of the seventh month, CyberSource returns to you what was collected during the first month, and so on. This type of reserve takes into account the seasonal nature of your business. A prepaid reserve that you provide. A flat reserve that is a percentage of your volume, with a maximum amount. If you plan to process bank cards, CyberSource typically requires a rolling reserve. If you plan to process direct debits, CyberSource typically requires a prepaid or flat reserve. No reserve is usually required for processing bank transfers. CyberSource is entitled to review and adjust the amount of the reserve regularly during the term of the agreement on the basis of actual risk and monetary volume associated with your CyberSource Global Payment Service account. Opening Your CyberSource Account and Completing the Intake Process After the merchant agreement is endorsed, CyberSource opens and configures your account. CyberSource processes any required forms necessary to open your local bank account. In some circumstances CyberSource opens new terminal IDs and merchant IDs for online and offline card acceptance. Important When opening your account you must inform CyberSource if you plan to use multiple CyberSource merchant IDs. For example, you may have separate business units within your company each with a CyberSource merchant ID. You must have a separate processor merchant ID for each CyberSource merchant ID. Your CyberSource account manager will work with you so that CyberSource has all the information it needs about the countries, currencies, payment types, and bank accounts that you will be using. CyberSource informs you when the local bank accounts are ready to receive funds from customers. Closing Your CyberSource Account To stop accepting payment types in a particular country or to close your CyberSource account, contact your CyberSource Technical Account Manager. Global Payment Service Planning Guide December

19 Transaction Life Cycle CHAPTER 3 Important Bank card processing with the Global Payment Service is similar to domestic bank card processing. Global bank card processing is not discussed at length here. CyberSource assumes that you already have a system for processing bank cards. Transactions and Events A transaction occurs when you request that CyberSource moves money in the form of a payment or a refund. You initiate transactions. An event is related to a transaction that you have submitted. You do not initiate events; banks initiate events. For example, you submit a transaction to CyberSource for a direct debit. Later, a payment Event occurs indicating that the bank has received the customer s payment. CyberSource supplies two reports to help you keep track of your transactions and events: Payment Submission Detail Report for transactions Payment Events Report for events For more information see "Order Reconciliation," page 30. Global Payment Service Planning Guide December

20 Chapter 3 Transaction Life Cycle Transaction Life Cycle This section focuses on the alternative global payment types, which are bank transfers, direct debits, and their associated refunds. CyberSource provides several tools that help you keep track of your transactions and indicate when to fulfill your orders and perform reconciliation. Figure 1 Transaction Life Cycle When you submit the transaction to CyberSource, it immediately goes through error checkpoint #1. CyberSource makes sure that the request has all the required fields and no invalid data. If the request has an error, CyberSource rejects it and you immediately receive notification in the reply. The transaction s status is set to CANCELLED. If the request has no errors, the transaction s status changes to PENDING. Search for the transaction in the Business Center. The Transaction Search Details page displays a transaction s status. You can search for one or more transactions using specific criteria. Basic information and current status of the transaction are displayed. Global Payment Service Planning Guide December

21 Chapter 3 Transaction Life Cycle Figure 2 Transaction Search Details Screen Order Tracking After you submit your transaction, several identifiers become associated with it. You can use these identifiers to keep track of the transaction in the CyberSource reports and the Transaction Search Details screens in the Business Center: Merchant reference code (merchant reference number) Transaction reference number (reconciliation ID) Request ID Payment reference number used for bank transfers only Request token Global Payment Service Planning Guide December

22 Chapter 3 Transaction Life Cycle Figure 3 Transaction Identifiers Identifiers for the Transaction Merchant Merchant Reference Code Transaction Reference Number (also called Reconciliation ID) CyberSource Request ID Payment Reference Number (for bank transfers) Merchant Reference Code You generate the merchant reference code and include it in the request. This field is a string and can contain a combination of data, such as your order ID and customer ID. The merchant reference code appears on all CyberSource daily reports. You can use it to search for the transaction in the Business Center. CyberSource recommends that you use a unique value for each order and that you use the same value for all requests that you send to CyberSource related to an order. For example, if you request a direct debit refund use the same merchant reference code for the direct debit refund that you used for the direct debit. This practice helps you track the order in your system and CyberSource s system. Transaction Reference Number (Reconciliation ID) CyberSource generates the transaction reference number (reconciliation ID) and returns it to you in the reply. CyberSource uses this number to track transactions with the payment processor. The value is guaranteed to be unique and it appears in various reports. Note You can reconcile your orders with their corresponding payments by using either the merchant reference code or the transaction reference number. Global Payment Service Planning Guide December