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1 PURPOSE
The procedure establishes an order how recording of Payment cards transactions is done in HIRETT Information systems and settlements with International card organizations.
2 TERMS AND ABBREVIATIONS USED
1. Administrator – a HIRETT IT division employee whose job duties include Transaction processing in the accounting system.
2. FD – Payment cards data processing centre the HIRETT has concluded and agreement with on Processing of Payment Cards Data, and which sends the Transaction data to HIRETT to process Transactions, solve customer complaints on the Transactions and solve other issues in cooperation with HIRETT regarding the Transactions.
3. CHARGEBACK – a transaction that is returned by the card issuer and / or the cardholder to the processing bank, and most often directly to the Customer, as a financial liability.
4. Responsible employee – a HIRETT employee who is authorised to serve Internet merchants.
5. Compliance laws, rules and standards – HIRETT operations governing laws and other legal acts, HIRETT operations related standards defined by self-regulating institutions, professional conduct standards and codes of ethics and other standards of best practice related with HIRETT activities.
6. Authorizations – an electronic verification process of payment card data, resulting in receipt of an approval or denial for Transaction performance from the Payment card issuing bank.
7. HIRETT – HIRETT Limited. HIRETT rates – the HIRETT Risk committee approved services price list that is valid at the day the respective operation is carried out.
8. HIRETT IS – a set of HIRETT data processing equipment and software
9. Registration system – an electronic registration system used by HIRETT and which ensures acceptance of Payment cards and serving the Customers
10. Employee – e private person who is actually employed by HIRETT based on an employment contract or other legal transaction, including HIRETT Board and Council members
11. Transaction approval code – a response code from the issuing bank of a Payment card received at the moment of authorization.
12. Dispute manager – Back office employee
13. Transaction – a settlement for goods or services made with a Payment card
14. E-shop – a customer’s – on-line merchant’s site on the Internet, where the Customer offers its goods or services.
15. CRM – Card Risk Manager – AML and Risk department employee, who is authorized by HIRETT to carry out activities defined in the Procedure.
16. AML manager – AML and Risk department employee, who is authorized by HIRETT to carry out activities defined in the Procedure.
17. Account Manager – Sales department employee, who is authorized by HIRETT to carry out activities defined in the Procedure.
18. AML/RD– HIRETT AML and Risk Department.
19. Customer – online merchant, businessman with whom HIRETT concludes or is willing to conclude an agreement on servicing Payment cards on the Internet.
20. Agreement – an agreement that is concluded (or to be concluded) between HIRETT and Internet merchant on servicing of Payment cards on the Internet.
21. Payment card – payment instrument allowing to pay for goods, services and withdraw cash using special machines (ATM), POS terminals or to make payments on the Internet.
22. Payment card user – a private person on whose name the Payment card is issued to.
23. Monitoring software – a monitoring software, for example, G2 Web Services, Web Shield etc.
24. Current account – a settlement account opened for a Customer in HIRETT in line with the HIRETT Customer registration, current account opening and customer file preparation procedure.
25. Current account with a payment card – a current account with a payment card opened on the Customer’s name in HIRETT in line with HIRETT Current account with a payment card opening and servicing procedure, which is used for HIRETT operations with a Payment card.
26. PIN – Personal Identification Number assigned to a Payment card. PIN serves for identification of Payment cards at the moment of transaction in ATM or POS terminals. The PIN replaces signature of a Payment card user when making transactions with the Payment card. Correct entry of PIN is proved by information that is saved in HIRETT Payment cards system.
27. Procedure – HIRETT Customer – online merchants procedure.
28. International Card organizations – international cards organizations VISA International, MasterCard International and others, each or any of these.
29. BACKOFFICE – HIRETT function that is responsible for registration of operations, payments and relations with the correspondent banks.
2 PAYMENT REGISTRATION AND SETTLEMENT
1. Processing of Payment cards Transactions for the previous day or previous days is done by the Administrator on each HIRETT business day after receiving files from HIRETT IS system. Payment card Transactions are presented in the Customer Current accounts and HIRETT transit accounts. Registration in transit accounts takes place by separate processing of card Transactions of International card organizations in various currencies and through the remaining balance consolidation in current currency – Euro. Transaction chargebacks are processed automatically in the Customers’ Current accounts and transferred to the respective HIRETT transit accounts in Euro.
2. In cases, when the Customer does not have a Current account opened with HIRETT, then a separate sub-account is opened in HIRETT IS for each such Customer in a special transit account, where processing of all Transactions related to the respective Customer takes place (cash instalment, write-off of commission and chargeback Transaction amounts, etc.). Cash funds transfers to the Customer to another bank are done by Back office employee according to a schedule which is coordinated with the Customer.
3. International card organizations carry out cash transactions with HIRETT though credit transfers to HIRETT corresponding account according to the volume of processed Transactions for the previous day. In case the chargeback amount or amount or costs related with the Payment card Transaction exceed the volume of Payment cards Transactions, a direct debit payment can be formed.
4. The basic currency for money settlements is Euro;
5. Back Office employees, based on statements of corresponding accounts, carry out processing of International card organizations’ credit transactions and/or direct debit written-off monetary funds in HIRETT IS and transfer these to special transit accounts;
6. Back office employee submits copies of print-outs from items of monetary funds that are transferred to the transit account.
7. Every day the Back office employee receives Reports form the International card organizations on volumes of processed Payment card Transactions and volumes of the related income and cost positions and monetary settlements for the previous days.
8. Every day when receiving information indicated in Items 2.3.2 and 2.3.3 the Backoffice employee carries out closing of settlements by Payment card Transactions in the following order;
9. Distributes Reports of the International card organizations and entries of monetary payment separately by the respective organizations;
10. Compares data with HIRETT IS data in HIRETT transit accounts and monetary payments entries for the respective previous date or respective previous dates, if closing of settlements is done for several days. Amounts of monetary settlements indicated in the respective positions of Reports and are actually entered to transit accounts have to match the particular date;
11. Enters data from the Reports of the International card organizations in special tables in Excel format and calculates the currency exchange rate differences from closure of mutual settlements. The currency exchange rate difference is permitted within 1% from the volume of processed Payment cards Transactions in HIRETT IS for the respective day. In exceptional cases the currency exchange rate difference may be greater than 1% (see item 2.5.6);
12. When after comparing is done according to Item 2.5.2 resulting in matching of monetary fund’s amounts transferred to transit accounts with Reports of the respective International card organizations and the calculated currency exchange rate difference from card of mutual settlements is within the limits (1%), then the settlements can be closed in HIRETT IS for the respective date (or dates) of the International card organizations Report.
13. When after comparing is done according to Item 2.5.2 and as a result the monetary fund’s amounts transferred to transit accounts do not match with Reports of the respective International card organizations and the calculated currency exchange rate difference from conclusion of mutual settlements greater than 1% or there are other inconsistencies, then the Backoffice employee carries out closing of settlements, reports this case to the Head of the Back Office and finds the possible causes for the inconsistency by contacting the respective IT. If the investigation shows that errors were present in the Payment cards operation processing procedure outside HIRETT, then IT Administrator ensures the necessary measures so that the International card organizations would carry out the necessary corrections in data, files and/or monetary settlements flows of the respective International card organizations Report data.
14. If the investigation shows that errors have been made in HIRETT systems during the Payment cards operations processing, then the IT are responsible for performance of the necessary measures to ensure correction of the error in the Payment cards operations processing in HIRETT systems. IT informs the Back Office employees in writing to the e-mail on a possible correction terms of data inconsistency or error, until which settlements cannot be closed for the particular Reporting period of the respective International card organization. The Back office employee may close the settlements only after information is received on correction of the error in Reports of the respective International card organizations, cash flows and/or data in HIRETT systems.
15. If according to the case indicated in Item 2.5.5 the currency exchange rate difference from closing of mutual settlements exceeds 1% and a written approval is received from the respective IT that the volume of this currency exchange rate difference is reasonable (for example, HIRETT IS has a processed volume of Payment cards Transactions for several days, week-ends or public holidays, as well as due to great fluctuations in currency exchange rates), then the Back office employee may close the settlements;
16. Closes settlements in HIRETT IS universal mode by selecting respective templates and entering settlements with the International card organizations according to data of the respective International card organizations Reports and table indicated in Item 2.5.3 by showing costs and income positions, Transaction amounts chargeback and other operations, as well as results of currency exchange rate differences.
17. When performing settlement closure according to the reports received from the respective International card organizations, the Back office employee reflects costs related with the Payment cards Transactions that are typical to everyday operations and where the amounts do not significantly differ from the average daily turnover. When during closure of transactions the Back office employee identifies amounts in the costs positions that are unusual or different from the average daily turnover, then these are presented in another account and a copy of the item print-out is submitted. In case of necessity the Back office employee can prepare a transcript of the respective cost positions through on-line systems of the International card organizations.
18. After closure of the settlements the employee verifies balances of transit accounts after the Payment cards operations in HIRETT IS.
19. The Back office employee after settlement closure for the respective date informs the Dispute manager and CRM employee by e-mail on separate Transactions amounts chargeback (Pre-arbitration funds disbursement, Arbitration case, Funds disbursement No., Acquirer chargeback reversals and others) according to the Reports of the Respective International card organizations, recorded on transit accounts “Assets for clarification” and “Liabilities for clarification”.
20. In cases indicated in the HIRETT Dispute management procedure the Dispute manager creates chargeback transactions of the respective Transaction amount in HIRETT IS universal mode, as well as the bank’s commission deduction transactions, and together with a Back Office employee verifies and approves HIRETT IS Transaction amount chargeback transactions, deducted commissions and closes the currency exchange differences in the respective HIRETT transit accounts if necessary.
21. If necessary, the Dispute manager prepares an order on performance of additional operations regarding processing of the Customer Payment cards Transactions and submits it to the Back Office employee. An order on additional operations to be made regarding processing of the Customer Payment cards Transactions is signed by the Head of Back office.