Online bankcard authorisation at cooperative savings associations

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This service was launched at the end of March 2009. It is in the pilot phase at present, providing online services to one cooperative savings association and offline services to 128 savings associations. When going live, our system will be able to provide real-time authorisation of the card transactions of all customers of the 129 savings associations related to Magyar Takarékszövetkezeti Bank via their respective account management systems.

The properties of the system supplied by Cardinal Kft.:
  • using a standard protocol (ISO 8583, BASE24) for communicating with GBC
  • management of card statuses, card limits and transaction limits (it manages POS and ATM limits separately)
  • capability of working with numerous types of account management systems
  • fast evaluation of transaction requests
  • stand-in authorisation capability
  • authorisation processes can be monitored and card transactions made in the previous months can be queried using a Back Office application

An Electra Base24 Server (EBS) specifically designed for this purpose provides all core system functions. It is connected to GIRO Bankkártya Zrt., the card system (KMS) registering all bankcards issued by Magyar Takarékszövetkezeti Bank and the account management systems of the different savings associations. We developed an interface for the account management systems at the end of the communication chain which defines the data content of the functions used in authorisation processes in a uniform way for developers.

Most of our partners involved in the authorisation project have already used an online communication link between their account management system and the Electra Homebanking or the Electra Internet Banking system. In the case of these savings associations, the authorisation interface uses the communication solutions implemented earlier. Since the implementation of the online authorisation interface meant the extension of the existing Electra interface in such cases, the communication between the affected account management systems and EBS was comparatively easy to implement also on the account management systems' side. In the case of savings associations which did not have a data link with an Electra server earlier authorisation is implemented in the form of SOAP messages.

The online authorisation process is implemented in the following form:
  1. GBC sends a Base24 authorisation message to EBS.
  2. Based on the information received from the card system, EBS checks the card validity, card limit and transaction limit values and determines the bank account number allocated to the bankcard.
  3. If the transaction can be authorised based on the above and the account number belongs to a savings association which has an implemented online connection, EBS forwards the request to the appropriate account management system. If the account number included in the authorisation request belongs to an offline savings association, authorisation is done by EBS.
  4. The account management system processes the request, and authorises or rejects it based on the current account balance.
  5. EBS processes the response received from the account management system and sends a BASE24 response to GBC.

EBS is also prepared to handle a miscellaneous operation scenario, in which some of the savings associations involved in the authorisation project do not have an online connection. In the case of these financial institutions, authorisation will seem to be carried out in online mode from GBC's point of view since the authorisation requests it forwards to EBS will be granted or rejected by EBS in such cases and not by the account management system of the affected savings association. In this case, request authorisation is based on account balance information, which is regularly sent to EBS by the account management systems of the different savings associations. This means that authorisations carried out with respect to those financial institutions are actually not online authorisations as the decisions about the card transactions are made not on the basis of the most recent account balance information available at the savings association.

The modular structure of our system allows it to work with various types of account management systems (and thus, to use different communication solutions).

We have functioning online interfaces with the following types of account management systems in the framework of the online authorisation project:
  • BOSS (Online Zrt.)
  • EuroBank (TAK-INVEST Kft.)
  • Orient (Opti-Tak Kft.)
  • Globe (Bank Assistance Zrt., testing in progress)

A further strength of EBS is the business logic which allows stand-in authorisation. Savings associations can usually not respond (or can provide only limited responses) to online authorisation requests received during the end-of-day (sometimes end-of-month) closing periods of their account management systems. Closing periods are registered by EBS based on the status reports received from savings associations and so EBS takes over the authorisation tasks from account management systems during their closing periods and carries out stand-in authorisation while these systems are inaccessible. When the closing period is over, account management systems are sent all requests handled by EBS while they were inaccessible. The same operating mode is used whenever a savings association becomes temporarily inaccessible due to some technical problem. When communication is restored, the account management system is sent all requests handled by EBS during the offline period.

Project implementation milestones:
  • August 2008: GBC certificated EBS.
  • December 2008: GBC switched over part of the cards issued by Magyar Takarékszövetkezeti Bank to online authorisation.
  • January 2009: GBC started to service all MTB bankcards through online authorisation, i.e. EBS started to handle authorisation requests.
  • End of March 2009: A system pilot was launched. The first savings association, which uses BOSS, performs actual online authorisation through the account management system interface. Authorisation requests related to the rest of the savings associations are responded to by EBS in offline mode.


What do card holders perceive of this?

The GBC system allows a response time limit of 5 seconds for the components of the communication chain, which guarantees that there is no significant delay at cash desks when card holders pay with their cards.

There is also some bad news to card holders:

Those times are over when somebody could withdraw all money from their current account at a savings association branch then go over to an ATM and withdraw the money again or pay through a POS terminal without having any funds on their account.
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