Cybersecurity Between Credit Card Issuers and Payment Processing Networks

Credit cards are the go-to option for millions of people to make purchases. When used correctly, they offer great perks, safer transactions, and increased purchasing power. This post will go through the groups involved, how the process works, the technical challenges, and how these challenges can be overcome.

Parties Involved

The bank or credit union that issues the card is one party, so they are known as credit card issuers. They are responsible for marketing their credit card, vetting the customer, and accepting the liability of their customers’ balances. In return for taking this risk, they receive revenue from credit card interest and other fees. The card issuers also are responsible for customer service and engaging directly with the credit card owner.

The payment card network is another party. Payment networks like Visa and Mastercard charge fees to merchants when their cards are used to make purchases. This is the reason some businesses offer discounts for debit or cash transactions. Payment card networks coordinate the transactions between the credit cardholder, the bank issuer, and the merchant. American Express and Discover are two payment card networks that are also credit card issuers.

The merchant and their acquiring bank also have a stake in the credit card digital processing. They also want to ensure the transaction is legitimate. To do this, like the issuer and payment networks, they have cleared the checks for suspicious activity. After the transaction clears the checks, the funds from the issuing bank are sent to the merchant. Some companies are both acquiring and issuing banks.

The customer who uses the card is the final party. The cardholder chooses their preferred card, makes purchases, and pays off the amount owed.

Messages and Connection

When a transaction happens, a series of messages are sent between the entities involved. This is known as authentication, authorization, and settling overall.

1. The cardholder makes a purchase at a merchant or online using a credit card.
2. The merchant’s acquiring bank sends the transaction to the payment card network, for approval.
3. The payment network sends the transaction to the issuing bank.
4. The issuing bank will review the transaction and approve or deny it, then send the decision back to the payment network.
5. The payment network sends notice to the merchant and the transaction will be approved or denied.

Credit Card Declines for Technical Reasons

The vast majority of reasons for a card getting declined are due to insufficient balance, fraud flags, and other expected issues. The steps in this complex process rely upon technology to work. There are instances where a technical issue causes a card to be declined. Reasons for a decline for technical reasons include improperly configured server of system or an outage due to malicious activity.

Secure the Connection

There are ways that the connection between the credit card issuer and the payment network can be made more secure. One of the best ways is to use software to log the activity happening between the issuing bank and the payment network. This data can be directly forwarded into a Security Information on Event Management (SIEM) and monitored on a 24×7 basis.

We will be holding a webinar with Cmd on the topic of Securing Cloud Connections. You need to ensure the digital connection between the bank servers and payment card infrastructure is sound. Cmd and Cipher monitor and secure the connection between the bank servers to the payment card infrastructure, in order to prevent attacks. In this webinar, we’ll show you how we do it and how you can do the same for your organization.

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