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ATM Payment Network Architecture

1) Understanding the ATM network

Figure-1 below depicts a typical Bank ATM network. There are different entities which come in to play to form an end to end ATM Payment network, such entities are:

• Issuer : Institution owning card
• Acquirer : Institution owning device
• Forwarder: payment Network forwarding transactions

2) Classification of transactions

Usage of a particular bank (let say bank ABC) ATM card on ATM devices owned by same/other banks could have following combinations:

• ONUS: Bank ABC issued ATM card is used at Bank ABC ATMs
• Remote Onus: Bank ABC Customer on Bank XYZ or any other banks’ ATM (Issuer transactions)
• Off-us or Not Onus: other Bank customers on Bank ABC ATM (Acquirer transactions)

A bank can be Acquirer for a few networks and issuer for some networks
An ATM can support following type of transactions:

• Cash Withdrawal

  - Cash Withdrawal (CASA)	
  - Fast Cash (CASA)	
  - Multi currency cash withdrawal (CASA)

• Cash and Cheque Deposit

  – Online Cash Deposit to Account (CASA)	
  – Cash Deposit via Envelope (CASA)  	
  – Cheque deposit

• Inquiry

  – CASA Balance Enquiry	
  – Mini statement

• Requests

  – Cheque book	
  – Statement

• Funds Transfer

  - FT to Own Account (CASA to CASA)	
  - FT within Bank Accounts (CASA to CASA)	
  - FT to Visa debit or credit card (From CASA)	
  - External FT over ATM shared Network (from CASA)

3) ATM Card and Tracks

An ATM card typically stores information on magnetic strip at the back of the card. following table gives a view of typical information captured on magnetic strip

Cardholder information on magnetic strip	Details
Primary account number (PAN)	Up to 19 characters. Usually, but not always, matches the card number printed on the front of the card.
Name	2 to 26 characters
Expiration date	four characters in the form YYMM
Service code	three characters
Discretionary data	Mmay include Pin Verification Key Indicator (PVKI, 1 character), PIN Verification Value (PVV, 4 characters), Card Verification Value or Card Verification Code (CVV or CVK, 3 characters)

4) ISO 8583 Overview

All ATM payments messages across world follows ISO8583 standards to speak a common language and resolve interoperability issues in Global ATM networks.

An ISO 8583 message is made of following parts:

• MTI – Message type indication
• Bitmap – Indicating which data elements are present
• Data elements

Some key data elements of the ISO 8583 message are

 – Institutions : Acquirer, Forwarder and Issuer 

 – Card and Pin data 

 – Terminal information : Card acceptor terminal ID, Card acceptor Terminal code, Card acceptor name

 – Transaction data : Transaction Type,  Amount & currency , transaction date and time, 

 – Reconciliation and Settlement data :Settlement and PAN Amounts, Currencies, Settlement date time, 
System trace audit number, Retrieval reference number 

ISO 8583 - MTI illustration

Position	Meaning	Usage
x1xx	Authorization Message	Determine if funds are available, get an approval but do not post to account for reconciliation, Dual Message System (DMS), awaits file exchange for posting to account
x2xx	Financial Message	Determine if funds are available, get an approval and post directly to the account, Single Message System (SMS), no file exchange after this
x3xx	File Actions Message	Used for hot-card, TMS and other exchanges
x4xx	Reversal Message	Reverses the action of a previous authorization
x5xx	Reconciliation Message	Transmits settlement information
x6xx	Administrative Message	Transmits administrative advice. Often used for failure messages (e.g. message reject or failure to apply)
x7xx	Fee Collection Message
x8xx	Network Management Message	Used for secure key exchange, logon, echo test and other network functions
x9xx	Reserved by ISO

Illustration (1987) for financial messages

• 0200 :Financial request
• 0210: Response for financial request
• 0220 : Financial advice
• 0230 : Response for financial advice
• 0221 : Financial Advice repeat

Following diagram shows a typical ISO8583 Message flow between ATM – Switch – Bank Host systems

Here, ATM transaction initiator is able to reach Bank Host (Step 1, 2 and 3)but reverse flow fails as Payment Switch can not contact ATM. In this case, Payment switch or ATM Controller issues Authorization reversal messages to Bank host (Step 5) and Bank host confirms the same (Step 6)

File:MTI flow.jpg

Figure-2 MTI Flow example

ISO 8583 - Data Elements

 Processing code:

       The processing code consists of six digits of the form TXFATA 

      a)  TX: Transaction
      b)  FA From account type, TA to account type
      c)  Common transaction codes are
       
       * Purchase 00
       * Withdrawal 01
       * Refund 21
       * Deposit 20
       * Transfer 40

      d) Common Account types are
       * 10 : savings
       * 20 : current
       * 30 : credit

      e) Example : funds transfer from Savings to credit account will have processing code as 401030

5) Illustration of ATM Cash Withdrawal across geography

ATM transactions could be of Single messaging system or dual messaging systems types.

In a single messaging system every online transaction settles itself.

In a dual messaging system, transactions are broken in two parts:

• Online transaction will earmark funds from account as part of approval
• Settlement transaction will post the final transaction to account and generate settlement entries.

Consider following scenario,

> an ATM Card holder Sandeep is on a Business visit to Japan
> Sandeep is a customer of Bank ABC in India (Pls refer to Figure-1 above)
> Sandeep has an INR account in India
> Sandeep uses his debit card (Issued by Bank ABC) in Japan to withdraw 1000 Yen from the ATM of Bank XYZ in Japan.

Diagram below shows the ATM transactions originated from Japan

Figure-3 ATM Global Payment illustration