Card network authorizations overview

Learn about network transaction integrations and authorization workflows at Pismo.

The Pismo platform is ready for Visa, Mastercard, or private label issuing of credit, debit, and prepaid cards. Pismo acts as a transaction processor that integrates with the card networks and the card issuers and guarantees the integrity of card network transactions. The Pismo multi-cloud platform can handle up to 15,000 authorizations per second.

The platform processes all event-dependent functions asynchronously so your customers can see everything changing in real time in their apps. This means all impacts to your accounting, regulatory reports, and treasury are also happening in real time.

Fund transfers in to or out of an account generate two types of records:

  • Authorization - A record stating that a given amount was authorized for adding to, or taking from, an account. It contains information about its nature, such as the amount, local currency, date and time, and applicable fees.

  • Transaction - Belongs to one particular authorization. It is a part of a complete purchase or funds transfer. It can correspond to a purchase installment, a certain fee amount, a statement payment, or a transfer between accounts, among other things. Transaction records are created only for full balance integrations.

Full balance integration vs. Zero balance integration

The Pismo platform supports the following card network integration models:

  • Full balance integration - Pismo performs all the necessary card and account validations to authorize or reject a transaction. In addition, the Pismo platform performs all the processing that controls the balance for an account in its life cycle.

  • Zero balance integration - Pismo performs some card validations. It also integrates with a card issuer that performs the necessary account validations to authorize or reject a transaction.

Authorization workflow

The authorization workflow is the same in both integrations all the way through the card validations.

  1. Every transaction flows as a message from the acquirer through the card network to the Pismo platform.
  2. The Pismo platform processes the message to extract and validate the card information.
  3. Once the Pismo platform validates the card information, the authorization workflow is different:
    • Full balance integration - The Pismo platform performs all the necessary validations to authorize or decline the transaction. If an anti-fraud system integration is set up, the Pismo platform sends the message to that system for additional verification.
    • Zero balance integration - The Pismo platform sends a standardized message to the card issuer for authorizing or declining the transaction. The card issuer first performs the necessary operational rules to check the available limit and balance impact. Then, they authorize or reject the transaction.
  4. The Pismo platform receives and processes the authorization outcome, translates the message into ISO_8583 format, and sends it back to the card network.
  5. The card network sends the message to the acquirer. Then, the merchant POS (point-of-sale) screen displays the transaction outcome.

In the Pismo authorization workflow:

  • Authorization/base I is the process of the initial request to the issuer to approve a transaction.
  • Clearing/base II is the process of finalizing and posting the transaction.

Card network authorization types

The Pismo platform supports the following card network authorization types.

  • Purchase
  • International purchase
  • Installments without interest
  • Installments with interest
  • Withdrawal
  • International withdrawal
  • Purchase return
  • Payment transaction