|
|
|
|
|
|
by farazbabar
2730 days ago
|
|
|
There is a lot more to it than that, there is merchant acquiring (merchant relationship with a payment services provider that gives merchants the credentials and equipment to accept payments), there are sometimes aggregators that transactions then funnel into. Next the transactions hit a network which acts as the router between acquirers and issuers (more on this later). The network can also act as a default stand in when the issuing bank is not reachable. From here the transaction goes into the issuing bank which runs a host of fraud and risk rules to answer the questions: 1. Should I authorize this? <- this is bank's prerogative and mostly deals with financial risk and 2. Can I authorize this? <- this is regulatory in nature and can be very binary and very binding. Its the the second question that also comes with binding regulations in some jurisdictions that prevent all parties along this chain from disclosing the reasons for declining, withholding funds or delay processing to affected parties. Even more interestingly, PayPal operates at most of these tiers almost entirely independently (PayPal API as the acquirer, PayPal as the aggregator, PayPal as the network of network AND of-course PayPal as the issuer with PayPal credit. Obviously not all transactions go through all tiers in case PayPal (a credit card transaction goes to card network and card issuer in the back for example) but Pay upon invoice, Bank transfers and PayPal credit (bill me later) are all examples of PayPal extending credit to buyer. Payments are quite fascinating, you are correct that a lot of issues are political but don't underestimate the complexity of the ecosystem, especially in global context. And I have not even gotten into bad faith actors and the war between good and bad guys yet. |
|
|