Payment Gateway

On-Line Transaction with ISO-8583

A card-based transaction typically travels from a transaction acquiring device, such as a point-of-sale terminal or an ATM (Automated Teller Machines), through a series of networks, to a card issuing system for authorization against the card holder’s account. The transaction data contains information derived from the card (e.g., the account number), the terminal (e.g., the merchant number), the transaction (e.g., the amount), together with other data which may be generated dynamically or added by intervening systems. The card issuing system will either authorize or decline the transaction and generate a response message which must be delivered back to the terminal in a timely manner.

ISO 8583 defines a message format and a communication flow so that different systems can exchange these transactions. The vast majority of transactions made at ATM use ISO 8583 at some point in the communication chain, as do transactions made when a customer uses a card to make a payment in a store. In particular, both the MasterCard and Visa networks base their transactions on the ISO 8583 standard, as do many other institutions and networks.

Although ISO-8583 defines a common standard, it is not typically used directly by systems or networks. Instead, each network adapts the standard for its own use with custom fields and custom usages. For example, when a phone bill payment is conducted via an ATM, ISO-8583 messages will carry specific informations such as phone number, subscriber’s name, due date, invoice number, and bill amount. These information is sent back and forth between bank mainframe and the phone company for process. Here, the phone company acts as Biller while the bank acts as Collecting Agent.

Payment Gateway is implemented on biller’s side handling ISO-8583 messages coming from collecting agents for transaction request. Once implemented, billers will be able to accept various financial transactions via any media provided by collecting agents, such as ATM, internet banking, mobile banking, or even good-old-fashioned tellers on one single system interface. This will add an enormous commercial value to both biller and collecting agent, which can derive higher sales on market.

Payment Gateway was built on SUN Java Technology which is well-proven on enterprise level and multi-platformed. It has been implemented since 2003 on telecommunication and airline industries, bringing from 200 million to 200 billion rupiahs on daily basis.

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