Brion BonkowskiManaging DirectorJune 6, 2013Boot Camp Week 2Improve your Payment IQMechanics of an ElectronicPayment - “Go...
 Notable Trends What’s Next? Wrap-up / Q&A Introduction Who is Interested in Payments? Ecosystem Recap w/ Terms &Ter...
 My Story – Moving into the Payment Space Who is ROI Payments? Why a Boot Camp Series?Introduction
 Who? Roles including Finance, IT, Sales, Marketing, and Treasury are all involved in the paymentchain at some point It...
 Recap of Five Major Categories from Boot Camp 1: Schemes Issuers Acquirers Processors Technology Authorization Pr...
Let’s Review Some Data regardingMarket Share by Payment Type
Non Cash Payments Market Share US vs EU vs BRICUSA & Canada EuropeBrazil, Russia, India, China
Card Purchase Volume in US (billions)
Now Let’s Do a Deep Dive onTransaction Flows
 Most typical electronic transaction Merchant Accounting System usually managed by ProcessorCredit & Debit Cards: 4 Part...
 Much simpler as less parties involved Better management of risk (chargebacks, etc) due to visibilityof both issuing and...
 Originating/Receiving Depository Financial Institution No authorization or guaranteed funds Costs less than cards due ...
 In several markets, banks or groups of banks have teamed upto provide Real-Time Bank Transfers. Real-time bank transfer...
 Closed Loop system doesn’t need to contact a 3rd partynetwork for auth, settlement, etc - it is all Internal. Best know...
 Innovation in payment networks being born from competing agendas:Google, ISIS, Amazon, etc Mobile Payments: Lot’s of bu...
Relevant Acquisitions American Express: Payfone for mobile payments Sometrics as a virtual currency and offers platform...
Contact Information:Brion Bonkowskibrion@roipayments.com212.812.4177 x: 2134Questions & Contact Info
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Payments IQ Bootcamp #2 - Mechanics of an Electronic Payment

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In this webinar, ROI Payments provides details on end-to-end transaction flows of major electronic payment types including Credit/Debit Cards, Real-time and Delayed Bank Payments, Digital Wallets, and Closed Loop Systems.

Topics include how each transaction network works, features and limitations of each payment type and which providers play key roles in each payment type. Coupled with the terminology and vendor ecosystem details learned in Boot Camp #1, ROI Payments will increase your Payments IQ with the business benefits and technical capabilities of each payment method.

Published in: Economy & Finance, Business
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  • Can you enable these slides to be saved like weeks 1 & 3? I'd like to share this with my colleagues and would be great if I could download and save it like the others.

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Payments IQ Bootcamp #2 - Mechanics of an Electronic Payment

  1. 1. Brion BonkowskiManaging DirectorJune 6, 2013Boot Camp Week 2Improve your Payment IQMechanics of an ElectronicPayment - “Go with the(Transaction) Flow”
  2. 2.  Notable Trends What’s Next? Wrap-up / Q&A Introduction Who is Interested in Payments? Ecosystem Recap w/ Terms &Terminology Electronic Payments Market Share Electronic Transaction Types Deep Dive of Transaction Flows Credit and Debit Cards - 4 Party Credit and Debit Cards - 3 Party Bank Payments (Non Real-time) Bank Payments (Real-time) Closed Loop & Digital Wallets (Pointsystems too)Agenda
  3. 3.  My Story – Moving into the Payment Space Who is ROI Payments? Why a Boot Camp Series?Introduction
  4. 4.  Who? Roles including Finance, IT, Sales, Marketing, and Treasury are all involved in the paymentchain at some point It is rare when someone is specifically assigned to payments, as such many people findthemselves unprepared to navigate the payment ecosystem ROI Payment Webinars attract A cross section of industries, including state/local government, non-profit organizations,eCommerce, SaaS and payment industry insiders Senior Finance folks (CFOs, controllers, etc), technology execs, operations managers andsales/marketing team members Why? People become involved in payment projects and need a holistic overview of the industryso that they can dive deep into their project, work, etc. Wikipedia and Google searches don’t provide a comprehensive understanding Result? Everybody can benefit from an increased “Payment IQ” Comprehensive understanding helps in today’s environment (rapidly evolving)Who is Interested in Payments
  5. 5.  Recap of Five Major Categories from Boot Camp 1: Schemes Issuers Acquirers Processors Technology Authorization Process for reserving funds on a card holder’s account(reduces available balance) Merchants use a gateway or terminal to performauthorizations against a “front end” network and receiveauth code No money changes hands during an authorization Merchants ~30 days to capture the authorization Capture / Settlement Merchant uses an authorization code to complete atransaction Merchants generally close a daily batch containingmultiple auths Amount captured can be lower than original authTerms & Terminology Void Removal of an authorization from the network Some networks do this realtime, others do not Refund Used to reverse a capture transaction References an original authorization code Funding Process whereby merchant receives funds fromcaptured transactions
  6. 6. Let’s Review Some Data regardingMarket Share by Payment Type
  7. 7. Non Cash Payments Market Share US vs EU vs BRICUSA & Canada EuropeBrazil, Russia, India, China
  8. 8. Card Purchase Volume in US (billions)
  9. 9. Now Let’s Do a Deep Dive onTransaction Flows
  10. 10.  Most typical electronic transaction Merchant Accounting System usually managed by ProcessorCredit & Debit Cards: 4 Party System1 234
  11. 11.  Much simpler as less parties involved Better management of risk (chargebacks, etc) due to visibilityof both issuing and acquiring historyCredit & Debit Cards: 3 Party System123Note that theissuer andacquirer are thesame party
  12. 12.  Originating/Receiving Depository Financial Institution No authorization or guaranteed funds Costs less than cards due to lack of interchangeBank Payments (Non Real Time)MerchantsOriginating BankCustomersBank
  13. 13.  In several markets, banks or groups of banks have teamed upto provide Real-Time Bank Transfers. Real-time bank transfers give an immediate onlineauthorization/confirmation of funds availability. Quick settlement (usually next-day), security for the merchantas payments are guaranteed (no chargeback) Security for the consumer (consumer interacts with their ownonline bank application) Often more cost-effective for higher value transactions,combining the benefits of a card-based transaction with thebenefits of a bank-based payment.Bank Payments (Real Time)
  14. 14.  Closed Loop system doesn’t need to contact a 3rd partynetwork for auth, settlement, etc - it is all Internal. Best known example is a merchant gift card – with themost popular being Starbucks card Digital wallets such as PayPal, Facebook Credits, etcare emerging Decidedly simpler than open-looped systems (aka multi-party networks) because the network, issuance andacquiring is all the same company These payment schemes generally come about inverticals or controlled markets (Starbucks, Playspan,etc)Closed Loop & Digital WalletsSBUX Card is a giftcard morphing intoa payment network
  15. 15.  Innovation in payment networks being born from competing agendas:Google, ISIS, Amazon, etc Mobile Payments: Lot’s of buzz but no real winner yet as there has beenvery little consumer benefit New Business Models – LevelUp and Google are willing to give awayprocessing in return for advertising opportunities and data eWallets and Closed Loop networks will lead innovation vs multi-partynetworksWhat’s Next and Should we Plan for Changes?
  16. 16. Relevant Acquisitions American Express: Payfone for mobile payments Sometrics as a virtual currency and offers platform eBay/PayPal: FigCard- mobile payments Zong- enabling phone bill billing for ecommerce Gifts Project- enabling group buying Google: Lending Club- a peer to peer lending platform TxVia- a prepaid processing platform Zave- digital coupons and loyalty Google: Lending Club- a peer to peer lending platform TxVia- a prepaid processing platform Zave- digital coupons and loyalty MasterCard: Linkable- turns ads into linkable offers tied tocredit cards Truaxis- a merchant funded offers network Visa: Playspan – Game specific closed loop networkand players card Fundama – Mobile based prepaid platform forunbanked consumers Square – App and Hardware for in personpayments
  17. 17. Contact Information:Brion Bonkowskibrion@roipayments.com212.812.4177 x: 2134Questions & Contact Info

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