Bank processing centers - structural divisions of banks

2024 Author: Howard Calhoun | [email protected]. Last modified: 2023-12-17 10:16

Have you ever wondered how the banking system works? How do ATMs and payment terminals know how much money is there? How do they know what, where and how was filmed? Banking processing centers (BPCs) are involved in all this, because it is they who own all the information. What are these structural divisions of banks? What functions do they perform? How do they work? Who provides these services? Is there a risk area? Where are large units of this type concentrated?

Why do we need bank processing centers?

First of all, let's deal with this issue. When they talk about banking processing centers, they mean special computing capacities authorized by certain payment systems, which have access to a database of participants (people) and personal computers (ATMs) that can use its capabilities. They provide authorization requests as well as transactions.

Bank processing centers record data on who made what payments where, who requested cash withdrawals from ATMs and many other actions (such as processing information about account limits andsending requests for authorization when the issuing bank does not have its own base for these purposes). As you can see, there are many functions. But not all of them are "equal". Large institutions often have main processing centers that handle the management activities of other, smaller units.

How does the center work?

The operation mode can be of two types:

1. Direct work with the processing center of "your" bank. In this case, it is understood that a person with his plastic card goes to the ATM of his institution. When he enters identifying information, it is transmitted directly to the issuer. Somewhere on a remote server, plastic cards are processed, and the information that he requested is returned to the person. Let's say how much money he has. If you request a large amount, the ATM will look at the received data and say that there is not so much cash. When requesting a balance, the device will count and provide data. At the same time, the ATM will send information to the processing center that it has issued a certain amount to such and such a person. Of course, there are overlays, but usually the circuit works flawlessly.
2. Interaction through an intermediary. In this case, the processing center sends a request to the bank that issued the card. If everything is fine, the answer goes back that the payment can be made. There are also transaction databases, which facilitates mutual settlements between different banks.

Outsourcing bankingservices

When a bank has its own BPC, it's one thing. Features in this case, we examined a little higher. Now let's pay attention to the transfer of all operations to another organization (also called outsourcing of banking services). This is usually done by small institutions that have relatively little activity. It can be called BPC (or simply PC) as you like, starting with Banking Processing Center OJSC to “Let's calculate for one or two”. Important in this case is the speed of fulfillment of the duties assigned to him, as well as the security of the processed data.

Additional features

The division may also have additional obligations: issuing new cards for businesses with subsequent personalization is not uncommon. The processing center is the technical core of the payment system. It operates under very harsh conditions. This is not surprising, because the center is guaranteed to process a large flow of transactions in real time. Therefore, there are also a number of strict requirements for the computing power of the processing center. It must prepare and present data for mutual settlements, process transaction protocols - and all this in just a few hours.

What is needed for the operation of the processing center?

Two points can be conditionally distinguished:

1. Substantial computing power. We have already considered this above.
2. Developed communication infrastructure. The BPC must simultaneouslywork with a large number of geographic points that are at a considerable distance. It is clear that high-performance data networks are required for efficient operation. Their importance is so great that they are even referred to as internal elements of payment systems, without which they cannot exist.

Communication centers are used to perform the necessary tasks that are provided for by the work of the bank. They provide the subjects of payment systems with access to networks through which data is transmitted. It is also their responsibility to ensure that no one can gain access to them for illegal purposes. Their work to provide high-speed communication lines allows you to maintain a bank processing center.

Terminals (ATMs) receive information quickly. By modern standards, delays are small: they can be a matter of seconds. This is not surprising, because the features of the ATM with the client are also strictly regulated. The terminal cannot process the request for more than 30 seconds. But this, as already written, is a bit of an outdated concept.

Geographic location

In the Republic of Belarus, a network of banks and large enterprises was created by the OJSC "Bank Processing Center". Minsk is the city where the head office is located. This means that the data in the capital will be processed in a few seconds. It all depends on geographic distance. It also has branches of JSC "Bank Processing Center". Grodno is a city wherelocated one of them. Therefore, here, too, various requests will be processed fairly quickly.

Expands and concludes new contracts with various large banks JSC "Bank Processing Center". Gomel (city) has already opened the doors of a new branch. Here you can make a cashless payment with cards of the "Belkart" system.

As it became clear, Bank Processing Center opens branches in many cities. Brest is no exception. You will find the PC in this city at the address: Brest, st. Molodogvardeyskaya, 3, bldg. 3.

Always notifies about various technical works, preventive maintenance, due to which the terminals do not work, "Bank processing center". Mogilev, half of the population of which are HRC customers, turned off the terminals on May 21 until 7 am.

Licenses

To make sure that the processing center can efficiently perform all the functions assigned to it, it is necessary to go through certain procedures that regulate most of the nuances. Legislatively, they have been established in most countries, as a rule, over the past 15 years. Issue licenses to all PSP/IPSP organizations. Their cost, as well as the opportunities that are provided by different states, vary in each individual country. But, to summarize, we can say that licenses allow certain companies, provided that they have agreements with banks that work with VISA and MasterCard, to initiate the procedure for debiting money from one account in order to subsequently credit it to another.

Additionaldocumentation

In addition to the above licenses, there are also regulatory documents of companies that can determine the general rules for interaction in the global card payment market. First of all, this applies to the previously mentioned organizations VISA and MasterCard. An example is the documentation of the first company's Card Acceptance and Chargeback Management Guidelines. By the way, with the development of the electronic payment market, there has been a tendency that large processing systems acted as the basis for creating their own. But still, the vast majority of companies of this type work exclusively with one area. This is both their strength and weakness: they don't own their own money.

What types of systems do BOCs use?

Conditionally they can be divided into the following types:

1. Whites are focused on interacting with companies that pay all taxes in their jurisdictions. They are among those that have a low risk of problems. But, alas, their activities are significantly complicated by high taxes, which creates some problems for them when competing with representatives of the following two points.
2. The gray ones include PCs that were registered in an offshore or low-tax jurisdiction. As a rule, companies of this kind are not very different from white ones. But they can get more income by paying less, and are also ready to work with almost any business:pharmaceuticals, sites for adults, trade on the verge of legality - it's all about them. The only feature is their unwillingness to work with clients who "came from the street." Therefore, you have to connect personal contacts, reputation, and sometimes look for a guarantor.
3. Blacks handle all payments. Even those that are outright illegal. For technical reasons, this is not possible without the bank that opened the account, so they work in conjunction. An example is odious offshore companies or Chinese banks. Due to the huge turnover, as well as significant risks, such structures are very complicated, and it is very difficult (but does not mean that it is impossible) to find the conditional owner of this money. In addition to the difficulty of establishing communication, there is also a very big risk that it may close at any time, and then the entire amount that was hanging on it will disappear.

About the Russian banking sector

Most of the financial institutions that issue their own plastic cards also have separate POSs. In this case, they act as a structural subdivision of banks, through which settlements are carried out between the participants in the system. They provide internal processing of transactions. BPCs that operate on the territory of the Russian Federation are also required to have a license from the FSB, which monitors the encryption of information.

Conclusion

As you can see, banking processing centers are an important part of the bank's structure. In addition to performing their main functions,they also have a number of additional tasks. They monitor the status of ATMs. And if the equipment sends a signal that the terminal, for example, is being hacked, the data is processed and transferred to the security service.