Designing a merchant acquiring system

Hello There!

Today, i’m going to explain a merchant acquiring system that i had designed in my previous company.

What is acquiring bank? according to wiki an acquiring bank (also known simply as an acquirer) is a bank or financial institution that processes credit or debit card payments on behalf of a merchant.

Acquirers collaborate with merchants to help them expand their business. This often involves creating promotional campaigns, offering rebates, transaction points, and more.

CUSTOMER BEHAVIOURS

Usually, when a customer makes a transaction at a merchant, the process unfolds like this:

• Customers make a payment at the cashier using their credit or debit card.
• Cashier swipes/inserts the card and transmits the information to the Point of Sale (POS) terminal.
• Processor/card network/acquiring bank forwards the information to the card issuer.
• Card issuer verifies the transaction and provides feedback on its outcome.
• Processor relays the response back to the POS terminal.
• Authorization process confirms whether the transaction is approved or not.
• Merchant receives notification. If approved, the merchant can ask the customer to sign the slip.

FLOW REQUIREMENTS

The system requirement is quite straightforward, here is the process that i had implemented before.

• Receive a transaction from an EDC / POS / ATM / KIOSK / APPS
• Storing transactions to database
• Translating a PIN through HSM
• Forward the transaction to 3rd party or card networks/principle or banks
• Queue the message

THE FEATURES

That’s certainly describes the process of a merchant acquirer system product. Now, let’s discuss the features afterwards. Below is a list of the features:

• User/Group management
• Merchant Management
• Merchant Fee management
• Terminal / POS management
• BIN route handler management
• Message converter (from ISO8583 to JSON / from JSON to ISO8583)
• Transaction risk management (Alert and holding transaction)
• Generating clearing and settlement report
• Key Management (Exchanging a key, downloading a key, etc)

Additionally, here is the high-level architecture design that you might know.

The acquiring system should handle all transactions across every channel.

If you are interested in developing a merchant acquiring system like the one i have described above. Furthermore, feel free to reach out to me for a detailed discussion ☺️😊.

If you want to learn about my other note, you might visit here for code and database section, it is still related on what you wanted to learn in all about technology itself.

Cheers! 🥰