Merchant Acquiring

and POS Transaction Handling


 Card Banking Overview
 Merchant
 Merchant acquiring business
 Merchant Acquiring
 Key Functions
 Merchant payment cycle
 POS (Point of sales)
 Type of Card used
 International card
 Local Card
 Type of Services
 Branch POS
 Merchant POS
 POS Deployment process
 Making Balance Order
Training Contents
 Parts of POS machine  POS related Dispute Handling
 Contents and functions of POS Menu  Precaution to be taken
 AB POS user Management  Merchant Follow up
 Operator login  Training and Support
 Supervisor login  Transaction Monitoring
 Password change  Monitoring tools
 Transaction processing  Card Fraud
 Executing Purchase (sales)  Challenges
transaction
 Summary
 Executing Void transaction
 Executing transaction report
 Executing refund
 Executing manual entry transaction
 Changing rolling paper
 Online transaction
 Card Banking Overview

 A bank card is a payment card issued by a bank. Bank cards let customers
access funds in checking or savings accounts or make purchases against a line
of credit. ATM cards, debit cards, and credit cards are all considered types
of bank card.

 Awash CARD BANKING includes:

 ATM
 MERCHANT ACQUIRING (POS)
 Advantage of Using POS Machine

 Elimination of paper work and manual processing of financial transaction

 Transfer of funds at the moment of payment (on line) which drastically increase the
speed of financial transaction
 Operating cost are kept to minimum
 Increasing market share by introducing new business model
 The interactive features of communication over the internet
 Merchant

 A Merchant:- is any business entity that is authorized to accept cards as a payment for
goods sold or services provided.
 it’s based on the business nature license, it may have certify the use of international
as well as local card transaction.
 Target customers

Our target customer(merchant) are star hotels, traditional restaurant, supermarket, drug
stores, gift shop etc.,
 Eligibility to be Awash Bank Merchant

 Any merchant who fulfils KYC requirements set by the Bank is eligible to apply
for providing POS services.
 For natural person, he/she shall be at least 18 years old and capable of signing
a contract.
 For a business or other organisation, the merchant shall fulfil the legal
requirements for a registered business.
 The merchant shall have either prepaid or post-paid mobile number registered
with the Ethio-Telecom in his/her name.
 The merchants shall agree to accept payment cards, avail the required
network and give POS services.
 A customer must have a payment card (debit, prepaid or credit) to get POS
services.
 Documents to be fulfilled to be merchant

 Sole Proprietorship
Renewed trade license,
Principal registration certificate,
TIN Number
Trade Name, if any
Power of Attorney, if any, etc

 Partnership and PLC

Renewed trade license,
 Principal Registration certificate,
 Article of Association[AOA],
 Memorandum of Association[MOA],
TIN Number
Trade Name, if any
Power of Attorney , if any
 Minutes to amend AOA & MOA, if any, etc
 Documents to be fulfilled…

 Government organization
Establishment Proclamation
 General Manager Assignment Letter
 Power of Attorney, if any, etc
 Merchant acquiring

 is an integral part of card payment transactions processing. Acquirers enable merchants to accept
card payments by acting as a link between merchants, issuers, and payment networks—providing
authorization, clearing and settlement, dispute management, and
information services to merchants.
 A cardholder begins card transaction by presenting his or her card to a merchant as payment for
goods or services. The acquiring bank (or its processor) captures the transaction information and
routes it through the appropriate card network to the cardholder's issuing bank for approval.
 An acquirer :-is a financial institution that contracts with merchants to accept cards for payment of
good and services .
 A cardholder:- is an authorized user of payment debit cards or other type of card products .
 A card issuer:- is a financial institution, bank, credit union or company that issues(or causes to be
issued) plastic cards to cardholders.
 Merchant acquiring…

 A merchant acquirer is a financial institution that processes credit and debit card
transactions for a company or merchant.
 A merchant acquirer may also be referred to as an acquiring bank
 An acquiring bank (merchant acquirer) processes card transactions on behalf of the
merchant.
 Therefore, an acquiring bank is a middleman for the merchant, and the issuing bank is the
middleman for the customer.
 Merchant acquirers help in completing the card payment transaction cycle by ensuring the
flow of funds to respective parties.
 To ensure this flow of funds, acquirers perform four key functions:
 Merchant acquiring…

The four key functions are

Merchant sign up

Key functions
Dispute management Transaction
authorization

Clearing and
settlement
 Merchant acquiring
key functions…

1. Merchant Sign-Up
 The first function of acquirers is to sign-up merchants to accept card-based payments.
After signing up the merchant, the acquirers underwrite the merchants to ensure their
financial stability, which is important in checking the credit-worthiness of the merchant.
Acquirers at times also provide point-of-sale equipment and other services to the
merchants if specified in the merchant agreement.
2. Transaction Authorization
 Authorizing transactions is a critical function of acquirers as it ensures that the payment
is and that there will be no dispute in the future settlement. Operationally, when
card is swiped at the merchant’s POS terminal, the acquirer receives an authorization
request from the terminal
 Merchant acquiring
key functions…

3. Clearing and Settlement

 The merchant acquirer transmits the sales transaction data received from the
merchant to the respective card-issuing bank via the payment card network. The
issuing bank charges the cardholder’s account and sends the funds to the acquirer
through the payment network, subtracting its fee. The acquirer then credits the
merchant’s account, after deducting the fees paid to the issuer and the payment
network, and the fee for its own services
4. Dispute Management and Information Services
 Acquirers provide dispute management services including charge-backs, refunds,
and claims to the merchants. Further, as a value-added service to the merchants,
acquirers compile and report the merchant’s transaction data. The acquirers also
offer analytical services to merchants to help them to manage and improve their
card processing functions and decrease costs.
Merchant payment cycle
 Merchant payment cycle…

1. Cardholder uses a card as a payment mode

2. Merchant sends transaction information to the Acquirer by swiping or manually feeding
card information
3. The acquirer or third party processor on acquirer’s behalf sends the transaction
information to the card association
4. The card association sends the transaction information to the Issuer for authorization
5. Issuing bank pays the card association network once it validates the transaction (after
deducting its charge)
6. Card association pays the acquirer or processors on acquirer’s behalf (after deducting its
charge)
7. Merchants account is credited for the transaction amount by the processor (after
deducting its charge)
8. Purchase transaction is completed
9. Issuer bills the Buyer for the transaction.
 POS –point of sale

 POS is an electronic device used to process card payments at retail location and central component
of profit making business.
 A point of sale (POS) is a combination of software and hardware that a business owner needs to run
transactions
 POS device(terminal) does the following,
 Reads the information of customer credit or debit card
 checks the funds in a customer’s bank account are sufficient
 transfer the funds from the customer account to the merchant account
 record the transaction and print a receipt etc…
 POS connectivity

POS can be connected by GPRS (wireless) and ADSL (wired)connection

GPRS (wireless) connectivity –you can remove the pos from the desk before inserting
or swiping cards
 it needs restart to maintain or refresh the net work
ADSL connectivity (wired) –you can’t remove from the desk
 the charger and ADSL must be connected
Note both type of connection need continuous charger or power cable connection,
unless the power cable and the charger not connected for along time our pos machine
“alert interruption” or damage.
 If it is kept uncharged for along time the machine and the battery will be die.
 Awash POS

PAX S900 PAX S920 PAX Q80

 Do not accept ADSL  Do have base  Recent Device

 Good battery Usage  Use both key and  Both key and touch
 Do not have touch touch  Do not have character
screen  Both ADSL and GPRS
 International Cards accepted by Awash
POS machine
Visa card is a payment card that uses the Visa network
and is branded by Visa.
KEY TAKEAWAYS
 Visa cards are payment cards that use the Visa
network.
 Financial institutions partner with Visa to use the
company’s network.
 Visa cards come with a 16-digit account number,
microchip, and magnetic stripe.
 Types of Visa cards include credit cards, debit cards,
prepaid cards, and gift cards.
Master card is the second-largest payments
network, ranked behind Visa, in the global
payments industry
KEY TAKEAWAYS
 Mastercard is a payment network processor.
 Mastercard partners with financial institutions
that issue Mastercard payment cards processed
exclusively on the Mastercard network.
 Mastercard’s primary source of revenue comes
from the fees that it charges issuers based on
each card’s gross dollar volume.
 International Cards…

Also known as China UnionPay or

CUP or UPI internationally. is the
world’s biggest card network with Newly introduced international cards
more than 7 billion cards issued.
It is widely used by Chinese shoppers
internationally as well as
domestically.
 Local cards

 Local card our POS machine can be used all types local bank cards.
 i.e Etswitch for merchant types of business.
 For branch (cash advance) only PSS member bank cards
 TYPES OF Awash POS SERVICE
branch vs merchant

 Branch POS :we deploy selected awash branch for using cash advance
- it is different application from merchant pos
-when transaction are made; card holder account(dr.)
pos payable account (cr.)
-we used all local (pss) member card and international card (MC,VISA,UP)
transaction withdrawal limit for branch pos is br. 50,000
 Merchant POS: is a type of POS machine deployed to merchants for purchase purpose
- transaction withdrawal limit for merchant POS br. 150,000
 Note; seriously check the card holder ID, receipt signature, withdrawal limit and validity of a
receipt e.g. (RRN, invoice no., terminal ID,ETC.)
 POS Deployment Process

 After all document and procedures are completed, we make a

preparation of pos machine for deployment.
 deployment are made both the branch and our card banking staff to give
a short training and password to the merchant.
 branch immediately made balance order for the purpose of automatic
transfer settlement account to merchant account.
 continuous and strong follow up for support 24/7 services.
Making balance order account link
settlement and merchant
Parts of POS machine
 Contents and functions of POS Menu

 Using awash pos, cardholder or customer can get the following services
 Balance inquire
 Purchase (withdrawal)
 Account transfer
 Manual authorization
 Pre-authorization
 Mini statement
 Receipt reprint
 report
 PIN change
 Void
 refund
 Contents and functions…

List of menus displayed on our pos machine

 Cash back/deposit
 Preauthorization
 Void
 Refund
 Report
 Settlement
 Manual entry
 Adjustment
 Account transfer
 PIN change
 User Management on Awash POS Machine

 Operator User: This user is created of Merchant sale person or casher to manage sales payment
 To login as Operator User:
 Enter ‘’11’’ for users and press green button
 Enter ‘’22’’ for password and press green button
 Supervisor User: This user is created to Supervisor/Manager for the purpose of Void transaction, Refund
amount, or to grant manual entry access.

 To login as Supervisor User:

 First logout from operator page
 Press any key
 Select from the menu using Down Arrow
 Press logout
 Enter your User ID press green button
 Enter your Password press green button
 Transaction processing

Ways of card payment process

Magnetic stripe Magnetic stripe Contactless

Card Reader Card Reader Card Reader
 Transaction processing…

How to make payment or purchase

 before making any transactions, the pos machine must be ready for the following ways.

1. our pos machine must be put in front of cashier area desk

2. our pos machine must be and always on the charger
3. our pos machine always have a receipt reprint paper
4. our pos machine must have a sticker for differ from the other bank pos machine.
5. our pos machine must have a net work
6. open the pos machine by a user and password (supervisor or operator)
 Transaction processing…

1. purchase/sale
 the machine says ‘’waiting for card’’
 insert or swipe the card
 enter the amount based on the consumed bill press the green button
If the amount was wrong please press the yellow button to make adjustment
 enter PIN and press the green button
 after the transaction was completed successfully, the pos generate two copies of receipt
merchant copy and customer copy
 the merchant copy must be check and sign by card holder and keep it well, as a cash.
 Transaction processing…

2. VOID
- This action implies ‘’reversing” the wrong amount, or card holder rejecting transaction etc.
- Void transaction must be made before settlement or end of day transaction process
- Select void from the menu by pressing down arrow
- Enter supervisor password and press the green button
- Enter invoice number and press the green button, or if the case happened the last transaction press the red button no need of invoice
number.
- The pos machine generated two copies of receipt merchant and customer copy
 Transaction processing…

3.Refund
this implies after making end of day transaction or settlement
 select refund from the menu bar by pressing down arrow
 enter supervisor password and press green button
 enter the amount you want to refund and press green button
 enter RRN (reference number) from the receipt press the green button
 up on completion, receipt is generated by two copies merchant and customer
 Transaction processing…

4. Report
when we press the down arrow and select ‘’report” we got many option like
:receipt reprint
:total
:balance inquire
:short statement
4.1 Receipt reprint this helps to reprint the original receipt
some times our merchant reluctant to check the pos machine have paper so, successful transaction may made
without rolling paper at that times we make a receipt reprint.
1. press the down arrow and select report press the green button
2. select ‘’receipt reprint’’
3. enter invoice number and press the green button
4. after completion receipt will be reprinted
 Transaction processing…

4.2 Balance inquire you can inquire available balance by the following steps
 Press down arrow select ‘’report’’ and press green button
 Select balance inquire from the list
 Insert the card
 Enter your PIN and press green button
 After completion the pos generates a receipt indicates your balance

4.3 total this implies number of transaction and amount processed during a day
 Press down arrow select ‘’report’’ and press green button
 Select total from the list
 Press green button
 The pos generates a receipt called amount and number of transaction
processed
 Transaction processing…

5. Manual entry (card less transaction)

is a type of pos service that enable the card holder to make sales and reservation of room, other services
and let the merchant charges the agreed amount using the card in formation (PAN, expiry date) on the
pos machine.
The merchant make an agreement with the cardholder for use of future service and the card holder must
be send
• full card no.
• expire date
• amount
• supporting authorized document

Note Before making this kind of transaction we must check the fulfilment of our bank procedure.
1. The merchant make formal request by letter to branch
2. E-banking give an access only to sign additional agreement (addendum)
3 . E-banking give an access only for the conformation of region and branch
4. It needs close follow up and monitor the transaction
 Transaction processing…

Steps to make manual authorization

 Press down arrow select manual authorization press green button
 Enter manager password press the green button
 Select ‘’sale’’ from the list
 Enter the card number
 Enter expire date
 Enter the amount
 After completion, receipt is printed with merchant and customer copy
 Keep the receipt and supporting document
 Transaction processing…

6.Preautorization
is the process of authorizing and reversing funds for transaction such transaction is relevant for hotels
booking
it is the same procedure manual like manual authorization
For preauthorization :the card must be valid
card holder must have sufficient open to buy funds to cover the purchase
amount and reversing the funds for completion
 Transaction processing…

Steps to make preauthorization

 Press the down arrow select preauthorization and press the green button
 Again select preauthorization press the green button
 Insert the card and enter the amount
 Enter PIN press the green button
 The pos will generate a receipt
Conformation is the process of conforming preauthorization transaction
 Press the down arrow select preauthorization and press the green button
 press conformation and enter invoice number press the green button
 pos will generate a receipt conforming completion of transaction
 Transaction processing…

7. PIN change for your personal security PIN change is important

So, card holder can change their PIN by the following steps.
o Press the down arrow select PIN change and press the green button
o Insert card and enter old PIN
o Enter new PIN and conform by pressing green button
8. Settlement (end of day) merchants are required to perform settlement or end of day once every 24
hours. The recommended time to prefer settlement is 6:00 PM. The purpose of performing settlement is to
transfer the balance to merchant account.
Steps to make settlement
 Press the down arrow select settlement and press the green button
 Receipt will be generate after completion says ‘’end of day’’
Note after settlement we can not made ‘’void’’ but we can made refund
 Changing rolling paper

 Rolling paper –it needs strong attention because it is a receipt.

 some times merchant need to replace a new rolling paper before that
 We make check the size of rolling paper fit or not fit
 Be carful for the pos machine at time of changing the rolling paper; not use too much force it may broke.
To change the rolling paper please follow the steps
1. Pull easily the rolling paper holder and open
2. Insert the paper in to pos properly
3. Close both sides
4. Press and hold the green button to make the paper ready for printing
 Precautions

 If the customer is transacting with high value (up to maximum 150,000

Birr),
 request Valid ID and check against the name on the card.
 have the copy of his/her ID
 Void and Refund should be done by Supervisors
 If the POS is not active, it require Restart so that it will become online
 Frequent transaction may be symptom of fraud, Please do the needful
KYC
 Card holder must sign on the receipt to be generated from the POS.
 POS related Dispute Handling

 Amount may be deducted from cardholder account

without generating receipt
 Amount may be deducted twice due to system issue
• Try to contact Awash support team during the incident
• Advice first cardholder to check his bank balance
• If you sure about the deduction of the amount from
cardholder account, advice the customer to raise
dispute case by visiting his Bank
 How Can You get Support From Awash
Bank

Nearby Branches

Head Office- Merchant Recruitment

and Follow up- (0115303058)

Call Center (8980)

45
 Merchant Follow up

 The Branches, Regional offices and Merchant Recruitment and

Follow-up division officers are responsible for:
 POS machines are well protected from anything that damages
 POS machines are well guarded against burglary
 get cleaned at a regular interval of time and well protected
against dusts, insects, etc.
 Maintenances, when required, and regular services are made
 Regular Monitoring on site and online
 up to date information on the volume and value of transactions
carried out
 Training and Support

 Sufficient trainings to enable the merchants perform the POS

merchant banking operations and provide the services as per SLA
 KYC regulations,
 Anti-Money Laundering (AML) and/ or Counter-Financing Terrorism
(CFT) confidentiality of the information,
 Information on how to conduct transactions,
 POS machine security,
 Troubleshooting technology/equipment,
 Customer service,
 Fraud identification and management,
 Cash and e-float management, and
 Consumer protection laws.
 Transaction Monitoring

 Post-monitoring Fraud Stop’s automated transaction monitoring

is complemented by the manual review of suspicious incidents by a highly
qualified team of risk analysts
monitoring is a key part of merchant support and risk management
 e.g. we must check unusual amount, response code and merchant made at
time of transaction rolling paper fail.
 Chargeback management Our comprehensive risk management service ensures
clients don’t exceed the acceptable chargeback threshold to avoid the fines
imposed by international payment systems, as well as facilitating high payment
acceptance rates and minimal levels of fraud
 Monitoring tool

Our merchant needs conformation for transaction completion, at that moment we must support from our
select system or oracle system.
Steps to wards:
 Open and enter your branch maker and checker ID
 Select from the list ‘’switch management’’
 Select authorization from the top the left side of oracle
 Open authorization or online authorization depend on the merchant request
 Open the search navigation and write your merchant name
 Click ‘’ok’’ twice and wait for the second
 Check the status of the merchant request i.e. you check the date, the type of card, the status
(approval, decline) and check response code, reference number etc.
 Monitoring tool

Step 2
Step
1
 Monitoring tool

Step Step 4
3
 Monitoring tool
Step 6

Step 5
Monitoring tool

Step
6
Monitoring tool

Step 7
 Charge backs

 Charge
backs –results when an issuer charges back the purchase amount to the
merchant
 This is generally the result of a customer compliance to the issuer
 Chargebacks protect the consumers in the event of a fraud transaction,
customer dispute, or a technical error such as being charged by twice for a
transaction
 Merchant always follow card payment rules.
 Branchfacilitates for an immediate response for the answer of charge back
request from the merchant.
 Card Fraud

 Card Fraud is one of the biggest threats to business establishments

today.
 However, to combat the fraud effectively, it is important to first
understand the mechanisms of executing a fraud.
 card fraudsters employ a large number of modus operandi to commit
fraud. In simple terms, Credit Card Fraud is defined as:
 When an individual uses another individuals'’ card for personal
reasons while the owner of the card and the card issuer are not
aware of the fact that the card is being used. Further the
individual using the card has no connection with the card holder or
issuer, and has no intention of either contacting the owner of the
card or making repayment for the purchase made.
 Card Fraud…

 Card frauds are committed in the following ways:

 An act of criminal deception (mislead with intent) by use of
unauthorized account and/or personal information.
 Illegal or unauthorized use of account for personal gain
 Misrepresentation of account information to obtain goods and/or
services.
 Card Fraud…

Merchant Related Frauds

 MERCHANT COLLUSION : Merchant owners and/or their employees pass
on the information about cardholders to fraudsters.
 TRIANGULATION : The fraudster in this type of fraud operates from a
web site. Goods are offered at heavily discounted rates and are also
shipped before payment. The fraudulent site appears to be a
legitimate auction or a traditional sales site. The do normal
transaction, once fraudsters have card details, they order goods from
a legitimate site.
 Fraud-Prevention

 Card Present Transactions :

 DDA Chip Technology
 Chip Acquiring - CVM Verification
 Card Not Present Transactions
 3DSecure for CNP Transactions Online Controls (Switch Processing):
 Check Card
 Check Expiry vs System Date
 Check Expiry vs Database
 Check CVV, CVV2, iCVV
 Check ARQC – Check PIN – …. Etc.
 Challenges of existing POS deployment

 Most of the time any one of our branch focus only for deployment, and attention of quota.
Instead of the entire activity
 less attention by branch for follow up and support
 branch are Sending incomplete merchant agreement
 luck of role clarity e.g.
• branch marketing staff (DSR,RO,BDM) those staff must be assigned by the branch manager
 regional office must be assigned staff for this kind activity
 officers at e-banking
 before recruiting the merchant, the branch not made KYC
 not monitor transactions
 communication gap between the merchant, the supporting group.
 Summary and responsibility

 check withdrawal limit, customer ID, validity of card at time payment

 check the network at an indicator of network bar it may restart or not
 check the legal document and agreement
 up date and inquire information from other bank product
 close follow up i.e. (restart, rolling paper, power charger, make balance inquiry, check network at a net
work bar on the left side of our pos machine.
 all pos terminals deployed at branch for encashment shall be managed by the respective branch
 at monitoring time immediately inform your manager when you see unusual amount.