Appendix A: Definitions

The authorization and settlement process

When a card is used for a purchase at a merchant, the purchase is processed as described here.

1. At the point of purchase, the merchant submits an authorization request to their payment gateway and the acquiring bank.
2. Nium receives the authorization request. If card details match and there is sufficient balance on the card, the balance is reduced, and the authorization request is authorized.
3. The card processor submits a file to Nium containing a list of all authorization requests.
4. Nium subsequently receives a settlement record that specifies the amount that Nium has to settle with its issuing bank for that transaction. There could be minor differences between the purchase amount submitted in the authorization request and the settlement request if the transaction is being carried out in a currency different than the card currency (the card scheme would have applied different Forex fees).
5. It can take up to three days for a settlement record to be received by Nium after a purchase has been completed.

Single-use and Multispend cards

During the initial account configuration, Nium and the client defined the card type to be issued to the client. Nium supports two types of virtual cards:

• Single-use cards: these are cards to be loaded and used for a single transaction. Upon receiving the first authorization request from the card scheme, any remaining funds on the card become unavailable (the term used for this is frozen, preventing further authorization requests from being processed). The card is deleted upon receipt of the settlement record, and frozen funds are returned to the funding account.
• Multispend cards: These can be loaded and reloaded for multiple purchases. When a card reaches its expiry date, any outstanding balance on the card is returned automatically to the funding account.

Refunds

If the merchant cancels a transaction, Nium receives a refund record with the settlement records.

Typically a single-use card would have been deleted when a refund is received. In this case, funds for the refund are returned immediately and directly to the funding account.

Refunds on a multispend card are added to the existing card balance if the card is active or directly to the funding account in case multispend card is deleted.

Expired authorizations

Authorization requests can be automatically expired.
Sometimes, a merchant submits an initial authorization request (affecting the available balance on a card) but does not follow up with a settlement request. After a pre-set period, Nium automatically expires the authorization request.

• If the card is a single-use card, all funds (equal to the amount loaded on the card) are returned to the funding account.
• The authorized but unsettled funds are added to the card balance if the card is reloadable.

Manual adjustments

If issues occur, manual adjustments are possible. Theoretically, manual interventions would not be needed if there were no technical or manual issues in the system. All transaction entries recorded in the system would correspond to real-life transactions. In practice, however, there are situations when transactions are not processed correctly due to system issues or manual errors.
For instance, a purchase request could erroneously be processed twice because there are two transaction records when there should have only been one. In such a scenario, a manual adjustment is made to compensate for the action because executed and completed transactions cannot be reversed or cancelled. An administrator can only perform a compensating action to cancel the effect of the transaction.x
When a discrepancy is identified, the adjustment can be credited or debited in the same or subsequent months.

Authorisation reasons

The following authorization reasons are available.

Appendix B: Cases

You can receive the following sample reports:

• Card_Activity_daily_2014-06-25-04-31-21_0000001
• Funding_Account_Activity_daily_2014-06-03-05-34-55_0000001

These reports depict how the following cases are presented

• Single cases
• Other scenarios cases

To receive sample reports, contact the Nium support team ([email protected]).

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Note:

• Although named 2014-06-25, sample reports contain data with numerous dates from captured live data scenarios. These have been grouped in a sample file containing a majority of cases.
• Sample reports include two additional columns highlighting the cases. Real reports do not include these columns.
• Columns externalID and customField1 to customField20 have been left empty because these are usually populated by the client when creating a card in Nium.

Single cases

This section contains a list of single cases.

Other scenario cases

This section contains a list of other scenario cases: