In every card transaction, the different stakeholders involved are consumers, merchants, acquirers, payment schemes, and issuers.

All of them will have to work together to ensure that a transaction goes through.

Let us look at the transaction flow.

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The steps involved are:

1. Consumers use a card as a payment mode
2. The merchant swipes the card and sends transaction information to the acquirers or acquiring processors
3. The acquirers or acquiring processors send the transaction information to payment schemes
4. The payment scheme sends the transaction information to issuers for authorization
5. Issuing bank, after validating the transaction, pays the card scheme after deducting its transaction charges
6. Card schemes pay the acquirers or acquiring processors after deducting their fee
7. Merchant account is credited by the acquirers or acquiring processors after deducting their fee
8. The purchase transaction is completed

To be a part of this ecosystem, acquirers need to get their host validated and terminals integrated by the payment schemes. Likewise, the issuers need to get their host systems validated.

What does acquiring and issuing host validation mean?

It involves:

• Testing of ISO8583 messages to schemes from acquirer host and issuer host
• Involves authorization and financial messages
• EMV full chip transactions
• Clearing & settlement

For an acquirer to test their host and get their certification, they would need access to the issuer host, payment network host, and merchant terminals.

Assuming they have the merchant terminals, they need access to the other two hosts–issuers and networks.

Issuer hosts are fairly simple. You can buy payment scheme-qualified issuer host simulators and use them for transactional responses.

But what do you do about the network host?

Accessing MasterCard Authorization Simulator (MAS) and Visa Test System (VTS) is complex.

You must book a slot and wait to test your acquiring host systems with networks. If your host fails during the test, you must book the slot again and wait for your turn to test.

This is a massive drag on the timelines.

So what do you do then?

This is where you should look for a simulator that can help you do all your debugging and go for certification. During the certification, you will have to book the slots with the network simulators, and most likely, you will get your certification in the first iteration after a debug.

To test an acquiring host, you must look at a network simulator and the issuing simulator.

For the issuer host certification, the challenges are very similar. Here, to test an issuer host, you will have to look at a network simulator and an acquiring simulator.

Would you like to know more?

We are putting together a Webinar on the topic, “The why, what, and how of simulators in validating acquirers, issuers, and networks.”

This webinar was held on the 12^th of April, 2023.