3. Annexure A

This chapter contains the following sections:

3.1 Switch Software and Card Transactions Business

The following is a brief account of the Switch software domain and the components in a Cards Transactions Business network.

The following diagram illustrates the components in the switch network.

ATMs and POS Terminals are connected with the Switch Software system using proprietary message protocol depending on the upon the terminal device type. Switch software is also connected with ‘Interchanges’ like VISA and MasterCard.

A switch software system provides the following functionalities:

3.2 ISO8583 Protocol Overview

ISO8583 protocol is called the ‘Financial Transaction Standard for Card originated messages and Interchange message specifications’. This protocol provides for the exchange of information between an ‘Acquirer’ and an ‘Issuer’ for card transactions. The terms ‘Acquirer’ and ‘Issuer’ are explained below.

Acquirer

An Acquirer is the Bank that deploys the self servicing devices like ATM /POS and may have a switch system software and Interchange connections.

Issuer

An Issuer is the Bank that issues cards to its customers. It has the database of accounts and is connected to the Switch system software. In the course of transactions via the switch system, Issuers respond to Acquirers with approval or rejection messages.

3.3 Switch Transaction Categories

The Switch system transaction flows can happen in three different ways. Each flow is termed as a Category of the transaction. The categories are from the Issuer bank’s perspective. The following example explains the categories.

Consider that Oracle FLEXCUBE system is installed at YOUR BANK. Consider another bank, say HSBC, with which you can have card based transactions. Then the following are the categories depending upon which bank’s Card or Terminal is involved.

Cards

ATM/POS Terminal

Category of Transaction

YOUR BANK Cards

YOUR BANK

On-Us

YOUR BANK Cards

HSBC

Remote-On-Us

HSBC Cards

YOUR BANK

Off-Us

3.4 Accounting Entries – ATM Transactions

The following are the various accounting entries for ATM Transactions.

3.4.1 Accounting Entries for Cash Withdrawal Transactions

ON US

DR CUSTOMER A/C BILL-AMT (converted to a/c ccy)

CR CASH GL TXN-AMT

DR CUSTOMER A/C TXN_FEE (converted to a/c ccy)

CR P&L GL TXN_FEE

DR CUSTOMER A/C TXN_PROCESS_FEE (converted to a/c ccy)

CR P&L GL TXN_PROCESS_FEE

DR CUSTOMER A/C FC_CHARGES (converted to a/c ccy)

CR P&L GL FC_CHARGES

Remote – ON US

DR CUSTOMER A/C BILL-AMT ( converted to a/c ccy)

CR NETWORK SUSPENSE GL SETL_AMT

DR CUSTOMER A/C TXN_FEE (converted to a/c ccy)

CR NETWORK SUSPENSE GL TXN_FEE

DR CUSTOMER A/C TXN_PROCESS_FEE (converted to a/c ccy)

CR NETWORK SUSPENSE GL TXN_PROCESS_FEE

DR CUSTOMER A/C FC_CHARGES (converted to a/c ccy)

CR P&L GL FC_CHARGES

During Network Settlement

DR NETWORK SUSPENSE GL SETL_AMT

CR NETWORK NOSTRO A/C SETL_AMT (converted to a/c ccy)

DR NETWORK SUSPENSE GL TXN_FEE

CR NETWORK NOSTRO A/C TXN_FEE (converted to a/c ccy)

DR NETWORK SUSPENSE GL TXN_PROCESS_FEE

CR NETWORK NOSTRO A/C TXN_PROCESS_FEE (converted to a/c ccy)

OFF- US

DR NETWORK SUSPENSE GL SETL-AMT (converted to a/c ccy)

CR CASH GL TXN-AMT

DR NETWORK SUSPENSE GL TXN_FEE (converted to setl ccy)

CR P&L GL TXN_FEE

DR NETWORK SUSPENSE GL TXN_PROCESS_FEE (converted to a/c ccy)

CR P&L GL TXN_PROCESS_FEE

During Network Settlement

DR NETWORK NOSTRO A/C SETL_AMT ( converted to a/c ccy)

CR NETWORK SUSPENSE GL SETL_AMT

DR NETWORK NOSTRO A/C TXN_FEE

CR NETWORK SUSPENSE GL TXN_FEE (converted to a/c ccy)

DR NETWORK NOSTRO A/C TXN_PROCESS_FEE ( converted to a/c ccy)

CR NETWORK SUSPENSE GL TXN_PROCESS_FEE

3.4.2 Accounting Entries for Balance Enquiry

ON US

DR CUSTOMER A/C TXN_FEE (converted to a/c ccy)

CR P&L GL TXN_FEE

DR CUSTOMER A/C TXN_PROCESS_FEE (converted to a/c ccy)

CR P&L GL TXN_PROCESS_FEE

DR CUSTOMER A/C FC_CHARGES (converted to a/c ccy)

CR P&L GL FC_CHARGES

R-ONUS

DR CUSTOMER A/C TXN_FEE (converted to a/c ccy)

CR NETWORK SUSPENSE GL TXN_FEE

DR CUSTOMER A/C TXN_PROCESS_FEE (converted to a/c ccy)

CR NETWORK SUSPENSE GL TXN_PROCESS_FEE

DR CUSTOMER A/C FC_CHARGES (converted to a/c ccy)

CR P&L GL FC_CHARGES

During Network Settlement

DR NETWORK SUSPENSE GL TXN_FEE

CR NETWORK NOSTRO A/C TXN_FEE (converted to a/c ccy)

DR NETWORK SUSPENSE GL TXN_PROCESS_FEE

CR NETWORK NOSTRO A/C TXN_PROCESS_FEE (converted to a/c ccy)

OFF-US

DR NETWORK SUSPENSE GL TXN_FEE (converted to setl ccy)

CR P&L GL TXN_FEE

DR NETWORK SUSPENSE GL TXN_PROCESS_FEE (converted to a/c ccy)

CR P&L GL TXN_PROCESS_FEE

During Network Settlement

DR NETWORK NOSTRO A/C TXN_FEE

CR NETWORK SUSPENSE GL TXN_FEE (converted to a/c ccy)

DR NETWORK NOSTRO A/C TXN_PROCESS_FEE ( converted to a/c ccy)

CR NETWORK SUSPENSE GL TXN_PROCESS_FEE

3.4.3 Accounting Entries for Deposit

ON US

DR CASH GL TXN-AMT

CR CUSTOMER A/C BILL-AMT (converted to a/c ccy)

DR CUSTOMER A/C TXN_FEE (converted to a/c ccy)

CR P&L GL TXN_FEE

DR CUSTOMER A/C TXN_PROCESS_FEE (converted to a/c ccy)

CR P&L GL TXN_PROCESS_FEE

DR CUSTOMER A/C FC_CHARGES (converted to a/c ccy)

CR P&L GL FC_CHARGES

3.4.4 Accounting Entries for Funds Transfer

ON US

DR FROM A/C BILL-AMT (converted to a/c ccy)

CR TO A/C TXN-AMT (converted to a/c ccy)

DR FROM A/C TXN_FEE (converted to a/c ccy)

CR P&L GL TXN_FEE

DR FROM A/C TXN_PROCESS_FEE (converted to a/c ccy)

CR P&L GL TXN_PROCESS_FEE

DR CUSTOMER A/C FC_CHARGES (converted to a/c ccy)

CR P&L GL FC_CHARGES

3.5 Accounting Entries - POS Purchase

ON US

DR CUSTOMER A/C BILL-AMT (converted to a/c ccy)

CR MERCHANT SUSPENSE GL TXN-AMT

DR CUSTOMER A/C TXN_FEE (converted to a/c ccy)

CR P&L GL TXN_FEE

DR CUSTOMER A/C TXN_PROCESS_FEE (in a/c ccy)

CR P&L GL TXN_PROCESS_FEE

DR CUSTOMER A/C FC_CHARGES (converted to a/c ccy)

CR P&L GL FC_CHARGES

During Merchant Settlement

DR MERCHANT SUSPENSE GL TXN_AMT– COMMISSION (a/c ccy)

CR MERCHANT A/C TXN_AMT– COMMISSION (a/c ccy)

DR MERCHANT SUSPENSE GL COMMISSION

CR P&L GL COMMISSION

Remote – ON US

DR CUSTOMER A/C BILL-AMT (converted to a/c ccy)

CR NETWORK SUSPENSE GL SETL-AMT

DR CUSTOMER A/C TXN_FEE (converted to a/c ccy)

CR NETWORK SUSPENSE GL TXN_FEE

DR CUSTOMER A/C TXN_PROCESS_FEE (a/c ccy)

CR NETWORK SUSPENSE GL TXN_PROCESS_FEE

DR CUSTOMER A/C FC_CHARGES (a/c ccy)

CR P&L GL FC_CHARGES

During Network Settlement

DR NETWORK SUSPENSE GL SETL_AMT

CR NETWORK NOSTRO A/C SETL_AMT (converted to a/c ccy)

DR NETWORK SUSPENSE GL TXN_FEE

CR NETWORK NOSTRO A/C TXN_FEE (converted to a/c ccy)

DR NETWORK SUSPENSE GL TXN_PROCESS_FEE

CR NETWORK NOSTRO A/C TXN_PROCESS_FEE (a/c ccy)

OFF-US

DR NETWORK SUSPENSE GL SETL-AMT (converted to a/c ccy)

CR MERCHANT SUSPENSE GL TXN-AMT (converted to a/c ccy)

DR NETWORK SUSPENSE GL TXN_FEE (converted to setl ccy)

CR P&L GL TXN_FEE

DR NETWORK SUSPENSE GL TXN_PROCESS_FEE (a/c ccy)

CR P&L GL TXN_PROCESS_FEE

During Network Settlement

DR NETWORK NOSTRO A/C SETL_AMT

CR NETWORK SUSPENSE GL SETL_AMT

DR NETWORK SUSPENSE GL TXN_FEE

CR NETWORK NOSTRO A/C TXN_FEE (converted to a/c ccy)

DR NETWORK NOSTRO A/C TXN_PROCESS_FEE (a/c ccy)

CR NETWORK SUSPENSE GL TXN_PROCESS_FEE

During Merchant Settlement

DR MERCHANT SUSPENSE GL TXN_AMT – COMMISSION

CR MERCHANT A/C TXN_AMT – COMMISSION

DR MERCHANT SUSPENSE GL COMMISSION

CR P&L GL COMMISSION

3.6 Balance Handoff File Formats

Oracle FLEXCUBE generates ASCII files (‘|’ separated) with the balances of all the accounts that are linked with Cards. The following table gives the general Balance Handoff File Format of Oracle FLEXCUBE. You may have a different format installed as per your requirements.

Header

Field Sequence #

Field Name

1

No. of Accounts

2

Check Digits

3

Time Stamp

Body

Field Sequence #

Field Name

Size (Characters)

Description

1

Branch code

3

Oracle FLEXCUBE branch code

2

Customer Account num­ber

28

Account number

3

Account Currency

3

Account currency code - alpha

6

Available balance. This represents the amount available for withdrawal/spending. Switch should stand-in based on this field.

22

Available balance from Oracle FLEX­CUBE. Limit to be included should be definable.

Footer

Field sequence #

Field Name

1

No. of Accounts

2

Check Digits

3

Time Stamp

3.7 Network Settlement Message Format

The following table gives the format of the file accepted by Oracle FLEXCUBE for network settlements. Fields are separated by ‘|’ pipe symbol and the amounts are with decimal included. The following table gives the general format in Oracle FLEXCUBE. You may have a different format installed as per your requirements.

Field Sequence Number

Field Name

Size

Mandatory (M) / Optional (O)

Remarks

1

Message type

n4

O

If it is optional, original or rever­sal is identified based on Trans­action code

2

Card number

n19

M

 

3

Branch code

n3

O

 

4

Bank account number

ans 28

M

 

5

Transaction Code

ans 10

M

05 - Sale, 06 - Refund, 07- Cash Wdl, 25 - Sale reversal, 26 - Refund reversal, 27 - Cash wdl reversal. Refer Transaction service derivation logic in ear­lier sections.

6

processing code

ans 6

O

This is used for information pur­pose

7

Transaction Amount

n 22

M

Refer Amount derivation logic

8

Transaction ccy

n 3

M

Refer Amount derivation logic

9

Settlement Amount

n 22

O

Refer Amount derivation logic

10

Settlement Currency

n 3

O

Refer Amount derivation logic

11

Billing Amount

n 22

O

Refer Amount derivation logic

12

Billing currency

n3

O

Refer Amount derivation logic

13

Transaction Date (Format YYYYMMDD)

s 8

M

Used for Transaction matching

14

Transaction Time

s 6

M

 

15

STAN

an 12

M

Used for Transaction matching

16

Original STAN

An12

O

Used in reversals

17

Acquirer ID

asn 6

M

Used for Transaction matching

18

Terminal ID

ans 16

M

Used for Transaction matching

19

Card Acceptor ID

ans 20

O

 

20

Merchant Id

ans 20

O

 

21

Merchant Name

ans 40

M

Information purpose

22

Merchant City

ans 40

M

Information purpose

23

Merchant Country

asn 10

O

 

24

Merchant Cate­gory code

n 4

M

 

25

Retrieval refer­ence number of transaction

an 12

M

 

26

Authorization Code

ans 6

M

Used for Transaction matching

27

Authorization Reference

ans 20

O

Some other reference for matching

28

Response code

n4

O

if sent, only 00 is considered for processing

29

Domestic flag

S 1

O

D – Domestic

I – International

R – regional (Europe)

30

Settlement Account

Ans28

O

 

31

Pre-Auth and Charge back Data

Ans 45

O

Applicable only in case of Rec­onciliation

3.8 Merchant Settlement File Format

The following table gives the format of the file accepted by Oracle FLEXCUBE for Merchant Settlements. Fields are separated by ‘|’ pipe symbols. The following table gives the general format in Oracle FLEXCUBE. You may have a different format installed as per your requirements.

Field Sequence #

Field Name

Length

Mandatory / Optional

Description

1

Merchant ID

an 15

M

To be used to derive mer­chant a/c

2

Transaction code

2

M

To be used to derive the product

3

Processing code

6

O

ISO type processing code

6

Event date

8

O

Batch processing date

7

Amount

22

M

Total amount settled to merchant

 

Currency

3

M

 

8

Tax Amount

22

O

reserved for future use

9

DrCr Flag

1

O

incase switch sends, use it

10

Commission Amount

22

O

To be detected

11

Commission Flag

1

O

commission flag incase sent

12

Commission currency code

3

O

commission currency code

13

Merchant cur­rent a/c

28

O

incase merchant ID is not having any maintenance at Oracle FLEXCUBE

14

Branch code

3

O

Merchant branch code

15

Bank code

10

O

Merchant bank code

16

User Info

30

O

Reserved for CSE

3.9 Maintaining SWTB_PARAM Table

The SWTB_PARAM is the single record table for SWIG initial parameters. The maintenances in this table are done during implementation of the Switch Interface Gateway system. This is for your information only.

FOLLOW_ON

Y

AMOUNT_BLOCK

Y

SETL_BEFORE_FILE

Y

LOG_TABLE_KEY

MSG_­TYPE~RRN

CHG_ON_BALENQ

N

CHG_ON_ADSTMT

N

CHG_ON_MISTMT

N

CHG_ON_CHQBK

N

NO_TXN_MISTMT

10

ISO_VERSION

0

NO_CHK_LEAVES

25

ACC_STMT_PERIOD

1

UTIL_PROV_ACC_SEND

Y

BLOCK_EXP_DAYS

30

MAX_RETRY_COUNT

5

FCC_ACC_FROM_SWITCH

N

ONLY_PAN_FROM_SWITCH

N