ISAD

CREDITING
AND
SETTLEMENT
PROCESS
TABLE OF CONTENTS

1. ISAD CREDITING PROCESS

MODULE 1: DEFINITION OF THE CREDITING PROCESS

MODULE 2: ACTORS IN THE CREDITING PROCESS

MODULE 3: E-COMMERCE PAYMENT PROCESS

MODULE 4: ISAD CREDITING PROCESS

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TABLE OF CONTENTS

2. ISAD SETTLEMENT PROCESS

MODULE 1: DEFINITION OF THE SETTLEMENT PROCESS
MODULE 2: HOW PAYMENT GATEWAY SETTLEMENT WORKS
MODULE 3: PLAYERS IN THE INDUSTRY
MODULE 4: DEDUCTIBLES
MODULE 5: SETTLEMENT PROCESS TIMELINE
MODULE 6: CHARGEBACK PROCESS

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1.

ISAD CREDITING
PROCESS
MODULE 1: DEFINITION OF THE CREDITTING PROCESS

The ISAD crediting process consists of a breakdown of the steps through which every
commercial actor in the card payment chain receives their cut of the Merchant Service
Commission.

The Merchant Service Commission (MSC) is a fee that the Merchant pays to the
Acquirer for providing the electronic payment service.
MODULE 2: ACTORS IN THE CREDITING PROCESS

ACQUIRER SETTLEMENT TEAM INTERMEDIARY

PROCESSOR ISSUER AGGREGATOR

ARCA ISAD
 MODULE 3:
● Customer Initiates transaction on
the Merchant’s Payment Portal.

E-COMMERCE ● Acquirer sends Authorisation

request to the Issuer.
PAYMENT ● If yes, ISAD commences with
PROCESS capture ( the process where the
processor debits the issuer and
credits the acquiring bank).

● Settlement is then initiated

beginning with deducting the MSC
from the total transaction amount.
The MSC, also known as interchange
fees, will then be shared between
the issuer, processor, acquirer etc..
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Bring the attention of your audience over a key
concept using icons or illustrations

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MODULE 4: ISAD CREDITING PROCESS

MERCHANT SERVICE COMMISION TABLE TRANSACTION FEE TABLE

TRANSACTION FEE
(SUCCESSFUL Transactions) TOTAL

MSC TOTAL ISAD

(C.IQ) ARCA ISAD

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TRANSACTION FEE (Failed
As stated As stated As stated As stated
Transactions) TOTAL
in the in the in the in the
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 ● Settlement manager
receives the bank statement
from the acquiring bank and
initiates reconciliation and
settlement.
● Settlement manager
approves acquiring bank to
credit merchant aggregator
account excluding MSC,
transaction fees and
chargebacks.
● ISAD(Merchant Aggregator)
credits the Intermediary
Merchant in fiat currency via
inter-bank cross border
payments i.e. swift.
● Intermediary merchant
credits end merchants.

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2.

ISAD SETTLEMENT
PROCESS
MODULE 1: DEFINITION OF SETTLEMENT PROCESS

The settlement process is the steps through which funds make it’s journey from the customer’s
account to the merchant’s account. The term ‘settlement’ is also used to refer to the amount
transferred by an acquirer to a merchant for the acceptance of online payments.

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 MODULE 2: HOW PAYMENT GATEWAY
SETTLEMENT WORKS

PAYMENT
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PAYMENT
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SETTLEMENT

SETTLEMENT &
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MODULE 3: PLAYERS IN THE INDUSTRY

ACQUIRER SETTLEMENT TEAM INTERMEDIARY

PROCESSOR ISSUER AGGREGATOR

ARCA ISAD
 MODULE 4: DEDUCTIBLES

1 Merchant Service Commission 2 Transaction Fee 3 Chargeback & Fraud 4 Reserve

Fee paid by the merchant to be
shared among the processing parties
and charged as percentage of the
total transaction amount.
Fee charged to the merchant
by the Payment Processor for
use of the payment processing
platform, charged per
transaction for all transactions
processed.
Chargebacks and transactions
flagged as fraudulent are
debited from the next
settlement. However, every
chargeback transaction,
attracts a fee.
10% of the total
transaction amount is
held in reserve to be
refunded after the
stated number of days.

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MODULE 5: SETTLEMENT PROCESS TIMELINE

THURSDAY - MONDAY TUESDAY

Transactions are collated SETTLEMENT TAKES

within this timeline to PLACE
make provisions for
weekend transactions
SETTLEMENT
CYCLE SPANS
8 DAYS

WEDNESDAY

CREDITING OF MERCHANTS 16
 ● Acquirer spools approved
transactions and sends this data
to the card scheme.
● Card scheme contacts the
issuer authorising the
transaction.
● Issuer debits the Cardholder
and sends payment approval to
the scheme.
● The scheme debits the Issuer
and credits the acquirer for the
transaction amount.
● The settlement team processes
the settled transactions by
sorting the data, removes all
deductibles and calculates net
position.
● Net position is credited to the
merchant’s account.
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MODULE 6: CHARGEBACK PROCESS

CHARGEBACK

● Deducted from the total

transaction
● Limit of 50 chargebacks per
month for every merchant.

FRAUDULENT
TRANSACTIONS

● Debited from total

transaction amount
● Limit of $75,000 per
month or 0.9% of Total
Sales.
● Merchant is penalised
once limit is exceeded

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 ● Issuer raises chargeback claim
on behalf of the customer.
● Acquirer/Processor sends the
chargeback transaction to the
merchant for validation.
● The merchant responds by
advising the
Acquirer/Processor to either
accept or reject the claim.
● To reject, merchant provides
a valid receipt proving the
transaction was successful.
● The Merchant shares the
receipt with the
Acquirer/Processor.
● The Accepts/Processor
accepts or declines the
chargeback claim using the
receipt.
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 THANK YOU.

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