Credit Card Processing Companies Clearing System

Credit card processing companies clear transactions using the Global Clearing Management System (GCMS). GCMS routes messages in the Integrated Product Messages (IPM) format. This kind of format is an International Organization of Standardization (ISO)-based flexible format that contains all clearing system information.

IPM Message Structure

All credit card processing companies IPM messages contain 4 main components:

• Message Type Identifier (MTI). This is the first element of every IPM message. The MTI is invariably located in positions 1 through 4 of the message. The MTI identifies the message class. For example, MTI 1442 designates a chargeback message.
• Bitmaps. These are the 2^nd and 3^rd elements of every IPM message. The bitmaps show the presence or absence of ISO information elements (DE 1 through DE 128) in each individual message. There are 2 bitmaps in each message:
  • Primary. These occupy positions 5–12; show the presence of data elements 1–64.
  • Secondary. These are in positions 13–20; show the presence of information elements 65–128. Each bit contains a value of precisely 0 if the corresponding element is absent in the message or a value of 1 if it is present.
  • Data elements. These represent different, pre-identified pieces of data and follow the bitmaps in order by number (known as data element number). For instance, function codes are stored in DE 24 (Function Code) and indicate the specific purpose of a message in a given message class. Examples of function codes are 450 (first chargeback - full amount) and 453 (first chargeback - partial amount).
  • Message reason codes. For the first chargebacks, second presentments, and arbitration chargebacks, these codes are stored in DE 25 (Message Reason Code).
For instance, a first chargeback, initiated by credit card processing companies for a full amount for MasterCard message reason code 4837 - No Cardholder Authorization would have the following values:
• MTI 1442 - indicating that the message is a chargeback.
• DE 24 (Function Code) 450 - indicating that the message is a first chargeback for the full amount.
• DE 25 (Message Reason Code) 4837 - indicating the reason for the chargeback.

Chargeback Benefits of GCMS

GCMS provides credit card processing companies and merchants with:

• Retrieval request and response information in chargeback messages so that banks can tell instantly the outcome of a retrieval request.
• Dates for paperwork sent, if present, in the previous cycle.
• Data from the previous chargeback cycle with each subsequent one, so that banks are not required to search for this information in their archives. These data include amounts, reason codes, and DE 72 (Data Record) texts.
• IPM Second Presentment/1240 and Arbitration Chargeback/1442 messages display the reason for the 2^nd presentment or arbitration chargeback.
• IPM documentation indicators perform one task - to show whether paperwork will follow the transaction.