Visa Money Transfer Clients Short Version 13 April 2010

For Visa Bank Use Only

This presentation is furnished to you solely in your capacity as a customer of Visa International and participant in the Visa payments system. By accepting this presentation, you acknowledge that the information contained herein (the “Information”) is confidential and subject to the confidentiality restrictions contained in Visa’s operating regulations, which limit your use of the Information. You agree to keep the Information confidential and not to use the Information for any purpose other than in your capacity as a customer of Visa International or as a participant in the Visa payments system. The Information may only be disseminated within your organization on a need-to-know basis to enable your participation in the Visa payments system. Please be advised that the Information may constitute material nonpublic information under U.S. federal securities laws and that purchasing or selling securities of Visa Inc. while being aware of material nonpublic information would constitute a violation of applicable U.S. federal securities laws.


How Visa Money Transfer (VMT) works

Presentation Identifier.3Information Classification as NeededFor Visa Bank Use Only 3Money Transfer in CEMEA | February 2008

How Visa Money Transfer works

Cash

Originating Member

Account Funding Transaction (AFT) *

Sender

On-Us Card

Source of Funds

Bank Account

Acquirer’s Card Host and VAP

Member’s VMT service(Branch, Internet, ATM, Phone, Mobile)

Money Transfer Transaction

Files

Off-Us Card Instruction

Recipient Bank

Visa Card

Destination of Funds

Original Credit Transaction (OCT)

Recipient

Orig

inat

ing

Bank

Inte

rnal

Tr

ansa

ctio

n Fi

les

Off-Us issuing Bank

*AFT only required when OC is funded by a not “on-us” Visa card


Common set of controlsVMT BUILT ON EXISTING VISA INFRASTRUCTURE

• Original Credits sent only by a registered Visa Bank

• Banks are assessed for compliance with Visa AML policy (based on US Patriot Act)

• Originating Bank must comply with domestic laws and regulations

• Value cap = $2,500 per transaction

Recipient Bank (Any Visa Bank)

OC TransactionOriginating Bank (Registered Visa Bank)

Sender Recipient

• OC received only by a Visa Bank

• Banks are assessed for compliance with Visa AML policy (based on US Patriot Act)

• Recipient Bank must comply with domestic laws and regulations

• Funds can be received only into a valid Visa account (KYC)

Funds are exchanged only between trusted

banking entities


Legal and regulatory considerations1. Banks must comply with local and international regulatory

requirements

2. Sending and recipient Banks must implement following procedures: • AML (Anti-Money Laundering)

• KYC (Know Your Customer)

• transaction monitoring

• data handling and security

3. VMT requirements:• Maximum transaction limit for cross-border transfer is USD

$2,500 per transaction

• Maximum cash to card transaction at ATM is USD 500

• Sender’s data must be included into the Original Credit

(VMT Transaction)


VMT – Operating Requirement • Originating client must register with Visa for VMT

• Banks must comply with Visa’s AML Compliance Programme and Risk Monitoring Regulations

– Visa operating regulations take into account international policy on anti-money laundering and terrorist financing

– Associate banks must be AML compliant in addition to sponsor bank

• Recipient Client (Issuers) must accept OCs, except where prohibited by local law

• Recipient Client (Issuers) must post OCs within 2 business days

• OC pre-settlement message is optional

• OC transactions must include sender’s data

– different rules apply for domestic and international transfers

• Originating banks may submit foreign currency money transfer OC transactions into VisaNet for processing

• Banks must report VMT volumes

• When funding the transaction from “off –us” card, ownership of the funding card must be validated

• Registration program must be implemented when offer this service to “off-us” customer to ensure proper KYC and AML

is conducted.


Pricing


AFT Money Transfer Fee flows

VISA

CEMEA

AFT: acquirer Base II fee $0.0061 + 0.025% AFT Domestic Transfer Fee

SENDER

Member A

OriginatingMember

Member BMember B

FUNDINGFUNDINGIssuerIssuer

AFT* disbursement fee $0.49

Consumer Fee(at discretion of

Service Provider)

AFT – ACCOUNT FUNDING TRANSACTION IS USED TO COLLECT FUNDS FROM THE SENDER’S VISA CARD

DOMESTIC – AFT FEE PAID TO FUNDING ISSUING BANK IS USD 0.49 CENTS FOR ALL PRODUCTS

INTER & INTRA REGIONAL (INTERNATIONAL) – AFT FEE PAID TO FUNDING ISSUING BANK IS THE PRODUCT INTERCHANGE RATE

REGISTRATION PROCESS IS REQUIRES TO VAILDATE THE ONWERSHIP OF THE CARD USED IN THE FUNDIND THE TRANSACTION


OC Money Transfer Fee flows – Domestic/ International

SENDER

Member A

OriginatingBank

Consumer Fee(at discretion of

Service Provider)

$0.49 OC interchange fee

Member C

RECEIVING Issuer*

International OC:

Base II/SMS fee $0.046 +

($0.70+0.2%) OC international processing fee

Domestic OC:

Base II/SMS fee $0.0061+

0.025% OC domestic processing fee

VISA

CEMEA


VMT cost to Originating BankObjective: domestic tnx costs less then 1%Objective: international tnx costs less then 3%

International VMT (either OC or AFT are international)Fees (US$) AFT dom,

OC intAFT int, OC int

AFT int, OC dom

No AFT, OC int

No OC, int AFT

OC int fee $0.70 0.70 0.70 0.70 0.70OC int fee 0.20% 0.00200 0.50 0.50 0.50OC dom fee 0.025% 0.00025 0.063AFTdom fee 0.025% 0.00025 0.063OC IRF $0.49 0.49 0.49 0.49 0.49 0.49AFT IRF $0.49 0.49 0.49 0.49 0.49 0.49AFT Base II/ SMS domestic Acquirer 0.0061 0.0061OC Base II/ SMS domestic Acquirer 0.0061 0.0061AFT Base II/SMS international Acquirer 0.0460 0.0460 0.0460 0.0460OC Base II/SMS international Acquirer 0.0460 0.0460 0.0460 0.0460Total costs (ATV $250) 2.29 4.78 3.60 1.74 3.05Fixed costs, $ 1.73 1.78 1.04 1.24 0.55Service fee at 3% (ATV $150) 7.5 7.5 7.5 7.5 7.5Service fee at 3.5% (ATV $150) 8.8 8.8 8.8 8.8 8.8Costs as % of transfer (ATV $150) 0.9% 1.9% 1.4% 0.7% 1.2%

Ticket size, $ $ cost of transfer150 2.070 2.072 1.070 1.536 0.536 250 2.295 2.272 1.095 1.736 0.536 350 2.520 2.472 1.120 1.936 0.536 450 2.745 2.672 1.145 2.136 0.536 550 2.970 2.872 1.170 2.336 0.536 750 3.420 3.272 1.220 2.736 0.536

1,000 3.982 3.772 1.282 3.236 0.536 1,500 5.107 4.772 1.407 4.236 0.536 2,000 6.232 5.772 1.532 5.236 0.536 2,500 7.357 6.772 1.657 6.236 0.536

Ticket size, $ As % of transfer150 1.38% 1.38% 0.71% 1.02% 0.36%250 0.92% 0.91% 0.44% 0.69% 0.21%350 0.72% 0.71% 0.32% 0.55% 0.15%450 0.61% 0.59% 0.25% 0.47% 0.12%550 0.54% 0.52% 0.21% 0.42% 0.10%750 0.46% 0.44% 0.16% 0.36% 0.07%

1,000 0.40% 0.38% 0.13% 0.32% 0.05%1,500 0.34% 0.32% 0.09% 0.28% 0.04%2,000 0.31% 0.29% 0.08% 0.26% 0.03%2,500 0.29% 0.27% 0.07% 0.25% 0.02%

Domestic VMT (both AFT and OC are domestic)Fees (US$) AFT dom,

OC domNo AFT, OC dom

dom AFT, No OC

OC dom fee 0.025% 0.00025 0.030 0.030AFTdom fee 0.025% 0.00025 0.030 0.030OC IRF $0.49 0.49 0.49 0.49AFT IRF $0.49 0.49 0.49 0.49AFT Base II/ SMS domestic Acquirer 0.0061 0.0061 0.0061OC Base II/ SMS domestic Acquirer 0.0061 0.0061 0.0061Total costs (ATV $120) 1.052 0.526 0.526Fixed costs, $ 0.992 0.496 0.496Service fee at 1% (ATV $120) 120 1.2 1.2 1.2Service fee at 1.5% (ATV $120) 120 1.8 1.8 1.8Costs as % of transfer (ATV $120) 120 0.88% 0.44% 0.44%

Ticket size, $ $ cost of transfer50 1.017 0.509 0.509 80 1.032 0.516 0.516

100 1.042 0.521 0.521 120 1.052 0.526 0.526 150 1.067 0.534 0.534 200 1.092 0.546 0.546 250 1.117 0.559 0.559 350 1.167 0.584 0.584 450 1.217 0.609 0.609 550 1.267 0.634 0.634

Ticket size, $ As % of transfer50 2.03% 1.02% 1.02%80 1.29% 0.65% 0.65%

100 1.04% 0.52% 0.52%120 0.88% 0.44% 0.44%150 0.71% 0.36% 0.36%200 0.55% 0.27% 0.27%250 0.45% 0.22% 0.22%350 0.33% 0.17% 0.17%450 0.27% 0.14% 0.14%500 0.23% 0.12% 0.12%


VMT FeesConsumer Pricing

The Originating Member may charge a service fee to the consumer at their discretion. Any service fee must be clearly disclosed to the consumer at the point of transfer and printed on the transaction receipt. The customer must approve to the service fee and be given an opportunity to cancel the transaction without incurring additional charges.

Member FeesAn Original Credit (OC) rate of $0.49 (reference: VIOR Sec. 8.3B) is payable by the Originating Member to the Recipient Member. A CEMEA Account Funding Transaction (AFT) $0.49 (reference: CEMEA ML 40/05) disbursement fee is payable by the Originating Member to the sender’s Issuing Bank for any Visa Money Transfer service Account Funding Transactions. A Inter- regional Account Funding Transaction (AFT) will the prevailing product IRF will apply as member fee.

Visa FeesStandard processing fees are payable to Visa by the Originating, Funding and Beneficiary banks.

VMT Registration feeThe Originating Member pays a one-off USD $2,000 Registration Fee to Visa for VMT service registration.

VMT Domestic Transfer FeeDomestic Original Credit transactions incur a domestic transfer fee of 0.025%, payable by the Originating Member to Visa for every domestic OC transaction.

Domestic Account Funding Transactions incur a Domestic Transfer fee of 0.025%, payable by the Originating Member to Visa for every domestic AFT transaction.

VMT Cross-Border Transaction FeeOriginal Credits are exempt from the International Service Assessment (ISA) fee that is applied to cross-border transactions. Instead, a USD $0.70 plus 0.2% OC international processing fee is payable by the Originating Member to Visa for every international OC transaction.


Service requirements


Developing your existing infrastructure

Money Transfer transactions require: – “pull” - a debit transaction (Account Funding

Transaction AFT)– “push” - a credit transaction (Original Credit OC)

Banks develop their own customer-facing interface to their host system:

– in-branch POS– ATM– Internet– telephone– mobile

All services must comply with Know Your Customer (KYC) and anti-money laundering (AML) requirements


Visa Money Transfer: the component parts

ATM/ADM / in-branch POSInternet / phone / mobile

Consumer interface / access channel

Originatingmember

Funding options

AFT OC

communicationAML module

Acquirer host

customer database

VAP- Member-built/TTP

Service requirements

Transaction processing

Cash / bank account / card

Visa card

Receivingmember

Receiving/Funding options


Participation and access channels

In-branch POS• Originating bank must use SMS system (Base I/Base II systems allowed with approval from

Visa)

ATM/ADM terminals• Originating bank must use SMS system • Can use BaseI/Base II when the Originating bank is currently a dual message ATM acquirer

(subject to Visa approval)

Internet, mobile• Originating bank can use SMS systems• When offered to not on-us (off-us) senders must use Verified by Visa (VbV) to authenticate the

sender for AFT transaction over Internet• Originating bank must be VbV acquirer prior to implementing this VMT service over Internet

Access channels

• any Visa bank, whether issuer or acquirer, can offer VMT service• a bank wishing to offer VMT services must register with Visa by completing the relevant Service

Request Form• a bank without an acquiring license will need to complete an Issuer Registration Form • an Associate bank must register separately from their sponsor and must demonstrate their AML

compliance• an Associate bank must use their own BIN(s) to provide VMT service

Participation


Technical requirementsHigh Level


Original Credit VisaNet requirements

Original Credits are processed as credits

• coded with the MCC 6012

• in SMS it is an 0200 message with Processing Code “26”

• in BASE 2 it is a TC06 with Transaction Code Qualifier “2”

• an optional OC pre-settlement message in VIP/SMS 0100 with Processing Code “26”

• Originating and Recipient Banks are advised to implement:– provides confirmation at the point of transfer– supports OC checks against a list of blocked account ranges

in VisaNet to receive the OCs– supports OC check against a list of blocked cards, CRB etc.


Account Funding Transaction (AFT) VisaNet requirements

Funding Transactions are processed as debits

• follow the same flow in VisaNet as standard purchase debit

• coded with MCC 6012

• in VIP it is an 0100 with Processing Code “10”

• in BASE 2 it is a TC05 with Transaction Code Qualifier “1”

• in SMS it is an 0200 message with Processing Code “10”


Process FlowHigh Level


‘AFT-based Card to Account’ requirements

• Offered at ATM, in-branch POS, Internet, mobile/phone

• Used mostly for credit bill payments

• Based on AFT transaction only

Transfer receipt printed

Sender requests transfer

Restriction disclaimer

Sender agrees to

transfer fee


Transferreceiptprinted

AFT is sentSender

confirms transfer details

AFT amount includes transfer amount plus service fee

Transfer amount is collected from sender’s Visa card in another bank

Sender provides their Visa card and PIN (if at ATM)

Sender informed that they can only send to an account managed by the Originating Bank

AFT funds posted within bank’s system

Receipt includes transfer and customer service details

Sender provides account details that will receive transfer funds and confirms transfer amount

Service fee is calculated and disclosed

Transfer amount posted

• Restricted to transfers to accounts managed by the Originating Bank

• The service fee must be disclosed at the point of transfer and printed on the transaction receipt


‘Card to Card’ transfer requirements

• Offered at ATM, bank-branch at POS, Internet, mobile

• Based on both AFT and OC transactions

• AFT is used only in case when transfer is funded from a not on-us Visa card


Sender requests transfer

Sender KYC’ed

Sender agrees to transfer

fees


AFT sent Transfer receipt printed

OC sentSender

confirms transfer details

Sender instructs bank to send money to Visa card and confirms funding mechanism for transfer

Sending bank performs appropriate AML due diligence as required by local laws

Sent only in case when transfer is funded from not on-us Visa card.

AFT amount includes transfer amount plus service fee

OC 0200 message is sent and includes sender data

Receipt includes transfer and customer service details

Sender confirms recipient’s Visa card number, transfer amount and currency

Service fee calculated and disclosed

Sender confirm service fee and provides transfer funds

• Domestic transfers in local currency only

• Customer registration programme is required for not on-us senders using the service over the non Face2Face channel

• The service fee must be disclosed at the point of transfer and printed on the transaction receipt

Visa Money Transfer Clients Short Version 13 April 2010

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Transcript of Visa Money Transfer Clients Short Version 13 April 2010