Ask HN: Where/How do I learn about credit card payments and payment gateways
13 comments
This comment (and the two below it, since it got too long to fit in one comment) I wrote about 6 months ago covers my best attempt to figure out what the various players do: http://news.ycombinator.com/item?id=2445866
This is great! Thanks for the reply. I am guessing all these are custom networks with their own API and no fixed interoperability between payment processors, correct?
FeeFighters has a pretty good free ebook called "How to Be a Credit Card Processing Ninja" - http://feefighters.com/blog/free-ebook-launch-how-to-be-a-cr...
FeeFighter's ebook and many of their blog posts are a pretty great resource. Another great resource (especially for Rubyists) is Amy Hoy and Thomas Fuchs' http://jumpstartcc.com/
If you don't want to bother worrying about the details of setting it all up, look into Stripe.com or Samurai from Feefighters
If you don't want to bother worrying about the details of setting it all up, look into Stripe.com or Samurai from Feefighters
Read Gus Fuldner's posts on Quora. http://www.quora.com/Gus-Fuldner/answers
Seconded.
Also, Carol Benson & Scott Loftesness’s book, Payments Systems in the U.S., is quite an excellent introduction: http://www.amazon.com/dp/098278970X
Also, Carol Benson & Scott Loftesness’s book, Payments Systems in the U.S., is quite an excellent introduction: http://www.amazon.com/dp/098278970X
I work in the debit side of things (well for only about the next few months) so my experience is a tad bit different, I'll approach it from a debit perspective, credit should be somewhat similar.
The device you swipe your card at Best Buy is a merchant device. Best Buy has made an agreement with the device vendor to route its traffic over a specific network, say First Data.
When you swipe the card the network(gateway) decides where to 'route' the request based on the BIN (typically first 6 digits of the card number, can be more depending on how the card profile is setup). The network has BIN tables setup so they can easily identify which cards go where. After the merchants gateway has determined where to route the card, the request then propagates to the issuing network, from there it is sent to the issuer to approve/deny the request.
This is a simple high level overview and by no means complete.
Ex. path
User swipes card @ device -> Merchant devices sends transaction to First Data (where FDC is the merchant device gateway) -> First Data routes transaction to issuing network (Visa, MC, Cirrus) -> Issuing Network forwards request to issuer (issuance processor) for approval
In debit world, it used to be that the more 'hops' a request took to route back to the issuer, the more that interchange that was incurred.
There are all sorts of scenarios that can occur, for example, I'm working on a project that would circumvent the networks if the transaction is for a card issued by our bank (closed loop transaction), which avoids interchange fees paid to the network.
The device you swipe your card at Best Buy is a merchant device. Best Buy has made an agreement with the device vendor to route its traffic over a specific network, say First Data.
When you swipe the card the network(gateway) decides where to 'route' the request based on the BIN (typically first 6 digits of the card number, can be more depending on how the card profile is setup). The network has BIN tables setup so they can easily identify which cards go where. After the merchants gateway has determined where to route the card, the request then propagates to the issuing network, from there it is sent to the issuer to approve/deny the request.
This is a simple high level overview and by no means complete.
Ex. path
User swipes card @ device -> Merchant devices sends transaction to First Data (where FDC is the merchant device gateway) -> First Data routes transaction to issuing network (Visa, MC, Cirrus) -> Issuing Network forwards request to issuer (issuance processor) for approval
In debit world, it used to be that the more 'hops' a request took to route back to the issuer, the more that interchange that was incurred.
There are all sorts of scenarios that can occur, for example, I'm working on a project that would circumvent the networks if the transaction is for a card issued by our bank (closed loop transaction), which avoids interchange fees paid to the network.
This is a big topic. The keyword you're looking for is the four-party system. Take a look at the GAO or Federal Reserve papers on interchange reform, they give a good high-level view. Gateways and merchant accounts are only half of the equation.
It's been a while since I've seen an HN post where I can give valuable feedback, thanks for the questions!
1. Here is a way to do it, in Python: https://github.com/abunsen/Paython/blob/master/paython/lib/u...
2. Not sure on providers other than that they lend their brand / set guidelines for the banks that issue cards (Citibank). On the other hand, you've got a processor, like First Data who allow you to process cards (on the internet) via a gateway, like Authorize.Net. In some cases, the processor & the gateway are bundled, like in the case of the new Stripe payments.
3. AFAIK: Your cards magnetic strip is converted to numbers, sent to a gateway to be processed as a "card present" transaction (different, typically lower, fees for these) & asked for approval from the issuing bank, once approved the amount collected will sit in limbo for 1-7 days then deposited into Best Buys bank account.
1. Here is a way to do it, in Python: https://github.com/abunsen/Paython/blob/master/paython/lib/u...
2. Not sure on providers other than that they lend their brand / set guidelines for the banks that issue cards (Citibank). On the other hand, you've got a processor, like First Data who allow you to process cards (on the internet) via a gateway, like Authorize.Net. In some cases, the processor & the gateway are bundled, like in the case of the new Stripe payments.
3. AFAIK: Your cards magnetic strip is converted to numbers, sent to a gateway to be processed as a "card present" transaction (different, typically lower, fees for these) & asked for approval from the issuing bank, once approved the amount collected will sit in limbo for 1-7 days then deposited into Best Buys bank account.
there is a specific way the card numbers are issued by companies and that you could tell by the number which company issued it.
Here is a good resource for that info: http://www.merriampark.com/anatomycc.htm
Here is a good resource for that info: http://www.merriampark.com/anatomycc.htm
You should try out Stripe (https://stripe.com/). They make credit card processing a piece of cake.
Agreed. I checked out Stripe last week and they look terrific. I am planning to use them for any payment processing that I may need.
To simplify the task I have created a Clojure binding for their api, you can check it out at https://github.com/abengoa/clj-stripe . Just started, lot of work to do, but the functionality is all there. Feedback welcome, and much appreciated.
Plus, stripe.com has become visible only so recently (couple weeks) that other discussions linked here may not even include stripe. "A game changer by introducing developer-friendliness" is the takeaway that I got from the HN discussion at http://news.ycombinator.com/item?id=3053883
Yeah, the advantage of Stripe (not having to learn about this) makes it a great choice if you don't have a deep, burning academic interest in payment systems. Plus, it's a pretty good rate (at huge volumes, you could probably get the same rates, but would need to commit to high minimums), and very well supported.
Agree. Although they do make it super simple, so it wouldn't hurt to get some background knowledge on the whole process.
We're taking the leap and using Stripe for our recurring billing system, even though we have a merchant account. I just like it that much.
We're taking the leap and using Stripe for our recurring billing system, even though we have a merchant account. I just like it that much.
I learned a lot from this pivotal labs podcast and recommend giving it a listen:
http://pivotallabs.com/talks/88-demystifying-online-billing
http://www.slideshare.net/Recurly/lessons-learned-in-online-...
http://www.slideshare.net/Recurly/lessons-learned-in-online-...
I think you're referring to the Mint infographic, "Cracking the Credit Card code"
Link: http://www.mint.com/blog/trends/credit-card-code-01202011/
Link: http://www.mint.com/blog/trends/credit-card-code-01202011/
The creators of freckle offer a good overview of credit card processing: http://jumpstartcc.com/
There was a post about stripe.com not too long ago. Perhaps you should try checking them out
I have been trying to learn about credit card payment gateways and I am not finding the proper resources. Specifically - * I read (on HN) sometime ago that there is a specific way the card numbers are issued by companies and that you could tell by the number which company issued it. Where do I get this information? * What exactly do the different players do in the ecosystem? We have the providers (Visa, MC), issuers (Citibank), payment gateways, processors. * When I swipe my card at Best Buy what happens after the card is read?
Could someone please point me in the right direction?