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SD2019: Payment Card Processing V 1.

India SAP CoE, Slide 1


Payment Cards…?
The Payment Cards can be ,

The authorized user hands the merchant a credit


card in exchange for goods and services, and the
Credit Cards
merchant charges the amount against the line of
credit the issuing bank as established

Debit cards pull funds directly from the authorized


Debit Cards user’s checking account, not a line of credit.

Cash cards are purchased for a fixed amount and


Cash Cards recharged as the consumer uses them.

Procurement cards are used in B2B transaction


tailored to card holder’s internal purchasing process
Procurement Cards such as Purchase Orders.

India SAP CoE, Slide 2


Payment Card Processing
1 PrepareMe

2 TellMe

3 ShowMe

4 LetMe

5 HelpMe
India SAP CoE, Slide 3
Payment Card Processing
1 PrepareMe

2 TellMe

3 ShowMe

4 LetMe

5 HelpMe
India SAP CoE, Slide 4
Purpose

The mode of payment through payment cards is


frequently replacing cash

It is increasingly becoming valuable option for


business to deal with the new payment modes

Payment cards have a wide & increasing usage in Sales


and Distribution, Retail point of sale, Financial
Accounting, and Internet commerce

India SAP CoE, Slide 5


Use

Provide payment solution in place of cash

Payment card processing offers the businesses


efficiency, value and total peace of mind

Integrated with the existing accounting systems


for online processing

India SAP CoE, Slide 6


Challenges
Addressing the issue of payment card processing in
a variety of business environments

Thorough integration of payment card processing


with changing business requirements

Secure online Transactions with payment cards

Protect huge business loss due to inherent threats


in online processing

India SAP CoE, Slide 7


Payment Card Processing
1 PrepareMe

2 TellMe

3 ShowMe

4 LetMe

5 HelpMe
India SAP CoE, Slide 8
Business Partners in Payment Card Processing
The person whose
name is on the
credit card They have agreed
to accept deposits
generated by credit
card transactions
on behalf of
merchant

Cardholder

Issuing bank Merchant´s bank


Bank that
supports/provides
actual credit cards The financial institution that
receives authorization call
from merchant. Also known
Clearing house as Clearing house

Vendor or store that requires


credit card authorization before
goods or services can be
issued to cardholder

Merchant
India SAP CoE, Slide 9
Payment Card Processing - Phases

Authorization: The merchant gaining approval or denial for a particular


transaction

Settlement: A series of steps in which the Merchant’s Account receives


money from Cardholder’s line of credit.

India SAP CoE, Slide 10


Authorization Phase
• Merchant acquires credit card
information

• Calls Acquiring Processor for


Authorization
Merchant
Card Association • Acquiring processor contacts
Issuing Bank

• Issuing Bank sends authorization


/ rejection to Card Association

• Card association transmits


Clearing House Issuing bank answer to Acquiring Processor
(Acquiring Processor)
Query • Acquiring Processor transmit
answer to the Merchant
Response
• Merchant prints sales receipt for
signature or denies sales

India SAP CoE, Slide 11


Settlement Phase

•Merchant confirms goods with


Fulfillment notification
Merchant Issuing bank
•Card information sent to
Acquirer by Merchant Bank

•Acquirer sends data to Issuing


Bank

•Card is charged

•Issuing Bank transfers money


to Merchant’s account

Merchant´s bank Clearing House


(Acquiring Processor)

India SAP CoE, Slide 12


The Process flow in Payment Card Processing
Payment card plan attached to
header of Order/Contract

Sales Authorization
Order/Contract Clearing
house

Delivery Check validity


for authorization

Payment card data copied to billing doc. from order / contract


Payment card / authorization data forwarded to FI when billing doc. is released Settlement
Transaction involving cards can be posted to different G/L account

Accounting
Billing Authorization
document
information

India SAP CoE, Slide 13


Payment Card Processing from an External System

In this form of processing the


Authorization point of sale is the physical
location at which the goods are
paid for (usually the cash
Clearing house register)
Point of Sale
At this point no sales or
shipping documents are
created

When using point of sale


systems, authorization is
Settlement carried out from an external
system
Authorization Accounting
Billing
information document Relevant data is imported into
the R/3 System, where a billing
document is created

India SAP CoE, Slide 14


Transmitting Data to Clearing Houses

Clearing houses issue authorizations


SAP standard interface
for sales orders/contract and carry out
settlement.

An interface to external systems


allows the merchant to transmit and
receive data.
Converter
SAP has defined a standard payment
card interface that the merchant can
use to create protocols for clearing
houses.

Clearing house

India SAP CoE, Slide 15


Payment Card Processing
1 PrepareMe

2 TellMe

3 ShowMe

4 LetMe

5 HelpMe
India SAP CoE, Slide 16
Prerequisites

• A third party software is required to carry out authorization.


• The system relies on settings in Customizing for payment cards to
determine how and when to carry out authorization.

Clearing House

RFC Interface e.g.Delego to


SAP R/3
carry authorisation

Bank

Third party software

India SAP CoE, Slide 17


Payment Card data in Customer master

Click to
maintain
payment card
details

Blockin Default
g Payment
reason card

Card Type Category


(Visa,Amex etc) Credit, Debit
,etc.)

Transaction code: XD02


India SAP CoE, Slide 18
Payment Card details in Contract document

The contract header data contains the payment card details which are taken
from the customer master
Transaction code: VA41

India SAP CoE, Slide 19


Payment Card Authorization details in Contract

After saving the contract we can check for the authorization status (in change mode).
Also, note the card details are encrypted for security reasons
Transaction code: VA42

India SAP CoE, Slide 20


Payment Card values in Invoice

In billing document header, we can notice the billing value equals authorized
Amount, which is posted to the G/L account

Transaction code: VF02

India SAP CoE, Slide 21


Accounting Document

India SAP CoE, Slide 22


Payment Card type - Configuration

IMG-> Sales and Distribution-> Billing-> Maintain Payment card types

India SAP CoE, Slide 23


Payment Card Category - Configuration

IMG-> Sales and Distribution-> Billing-> Maintain card categories-> Determine card categories

India SAP CoE, Slide 24


Assign Payment Card Plan - Configuration

IMG-> Sales and Distribution-> Billing-> Payment cards-> Maintain Payment card plan types

India SAP CoE, Slide 25


Account Determination - Configuration

IMG SD Billing Payment cards Authorization and settlement


Maintain clearing house Account determination Assign G/L accounts.

India SAP CoE, Slide 26


Clearing House Assignment - Configuration

IMG SD Billing Payment cards Authorization and settlement Maintain


Clearing House Set Authorization/Settlement Control per Account.

India SAP CoE, Slide 27


Payment Card Processing
1 PrepareMe

2 TellMe

3 ShowMe

4 LetMe

5 HelpMe
India SAP CoE, Slide 28
LetMe
Transactions
VA01 Create Sales Order

VA02/VA42 Change mode for Order/Contract

VA41 Create Contract

Navigate to Enter Payment card details


GotoHeaderPayment Card

Navigate to Check credit card authorization


GotoHeaderPayment Card in status
change mode
VF01 Create Billing

VF02 Change mode

India SAP CoE, Slide 29


LetMe
Exercise:
Use Data in IDES.

Company code:1000;Sales Org:1000;Division:00.Shipping


pt.:10;Plant:1200;WM:012;Customer 1325;Material:R-1001;Credit card: VISA
4100000000000001;Account receivable for payment
card:146500;Intermediate account:113105.Sales doc. Type: OR.

Check customer master for 1325 and enter Payment card details if not
present.
Create Sales order for material R-1001 for qty 2.
Create delivery. Create Transfer Order. Create Billing and check accounting
doc.
Payment Card Settlement: Use Tcode: fcc1.For acct 146500;doc. Type: AB
Posting: Current date; Select detail log and Update run. Execute.

India SAP CoE, Slide 30


Payment Card Processing
1 PrepareMe

2 TellMe

3 ShowMe

4 LetMe

5 HelpMe
India SAP CoE, Slide 31
Additional Information
Establishing Copy Control for Credit Memo Request
 For standard returns document, copy control can be used to copy card
details from sales order (OR) to the returns sales document (RE).

 To arrest the difficulties in the transfer algorithm and the copying


requirements algorithm between service contract (WV) and credit memo
request (CR) enhancement is required in standard algorithm for this
document combination (051),and the standard copying requirement
algorithm (001).

Payment card details Credit Memo


Contract Request

India SAP CoE, Slide 32