Cards and Payments - Part 1 - Introduction to Payments and Cards Industry
Summary
TLDRIn this video, Saurabh Khandelwal, a manager in AI and analytics, introduces his YouTube series focused on the cards and payments industry. He aims to share insights gathered from his work in data and reporting, highlighting industry trends and best practices. The series is designed for professionals in the banking and financial services sector, specifically those in cards and payments. Viewers will learn about the roles of merchants, acquirers, networks, issuers, and cardholders through detailed explanations, and Saurabh encourages interaction through comments and feedback to foster mutual learning.
Takeaways
- 👋 Introduction: Saurabh Khandelwal introduces himself as a manager in the artificial intelligence and analytics space, working specifically with data and reporting in the cards and payments industry.
- 💡 Purpose: The video aims to share knowledge gathered over the years in both technical and functional areas of the cards and payments industry.
- 📊 Focus: The series will cover trends, best practices, and insights in delivering IT projects within the cards and payments domain, which is a part of the broader banking and financial services industry.
- 💳 Industry Overview: The payments and cards industry involves various players such as issuers, merchants, acquirers, networks, and cardholders.
- 🧠 Mnemonic for Entities: Saurabh introduces the 'MANIC' model to remember key entities—Merchant, Acquirer, Network, Issuer, and Cardholder.
- 🏦 Key Entities: The issuer is the bank that issues cards to cardholders, while merchants provide services and receive payments through acquirers who handle transactions on their behalf.
- 💻 Network Role: Networks like Visa and Mastercard process transactions, communicating between the acquirer and issuer to authorize and settle payments.
- 🏪 Everyday Usage: Saurabh emphasizes how everyday transactions, like using a credit or debit card at a grocery store or gas station, fit into the payments and cards industry.
- 📚 Target Audience: The videos are intended for software engineers and IT consultants working in the cards and payments domain, but are open to anyone interested in learning more.
- 💬 Interactive Element: While the videos are pre-recorded, viewers can leave questions and feedback in the comments, fostering a collaborative learning experience.
Q & A
What is the primary focus of the YouTube channel introduced in the video?
-The primary focus of the YouTube channel is to share knowledge about data, reporting, and trends within the cards and payments industry. The creator aims to discuss both technical and functional aspects, best practices, and current shifts in this domain.
Who is the intended audience for the videos on this YouTube channel?
-The intended audience includes software engineers, IT consultants, and professionals working in or transitioning into the cards and payments domain. However, anyone interested in learning about this industry is welcome to watch the videos.
What is the 'MANIC' model described in the video, and what does each letter stand for?
-The 'MANIC' model is a mnemonic device used to remember key entities in the payments and cards industry. It stands for: M - Merchant, A - Acquirer, N - Network, I - Issuer, C - Cardholder.
What role does the acquirer play in the cards and payments industry?
-The acquirer is responsible for taking money on behalf of the merchant and depositing it into the merchant's account when the transaction is settled. It acts as the intermediary between the merchant and the cardholder’s bank.
What is the function of the network in the payments process?
-The network handles the processing and communication between the acquirer and the issuer. It ensures that the transaction is authorized and that money is transferred from the cardholder's account to the merchant's account.
Can you give examples of networks commonly used in the payments and cards industry?
-Common examples of networks include Visa and Mastercard. These networks facilitate the processing of transactions between acquirers and issuers.
Who is considered a cardholder in the payments and cards industry?
-A cardholder is an individual, like you or me, who possesses a physical or virtual card used for monetary transactions, such as credit or debit cards.
What does the issuer do in the payments and cards industry?
-The issuer is the organization, typically a bank, that issues the card to the cardholder. Examples of issuers include Barclays, ICICI, and HDFC.
What is the role of a merchant in the payments process?
-A merchant is a provider of goods or services to the cardholder. Examples include grocery stores, e-commerce portals, and other businesses that accept card payments.
How does the creator of the YouTube channel intend to interact with viewers and take their questions?
-Since the videos are pre-recorded, viewers can ask questions and provide feedback in the comment section. The creator will address the questions in the comments or future videos.
Outlines
👋 Introduction to the Presenter and Video Purpose
In this paragraph, Saurabh Khandelwal introduces himself as a manager in AI and analytics, focusing on data, reporting, and the cards and payments industry. He explains the purpose of the video, which is to share knowledge gathered from years of experience in both technical and functional aspects of the field. The video series aims to foster collaboration, discuss industry trends, and share best practices within the cards and payments domain.
🎓 Purpose and Scope of the Video Series
Saurabh describes the aim of the video series, highlighting the importance of sharing insights on data and reporting trends within the cards and payments industry. He expresses his intent to make these videos a learning platform, covering project management, industry shifts, and best practices in IT. The series is aimed at professionals in the domain and anyone seeking to gain knowledge about cards and payments.
💳 Overview of the Payments and Cards Industry
The payments and cards industry, like other major verticals such as healthcare or retail, falls under the broader banking and financial services space. The focus of this video series will be on cards and payments. Saurabh touches on the variety of services within banking and finance, including consumer finance, loans, and mortgages, which all contribute to the complexity and vastness of this domain.
📱 Importance of Staying Connected During the Pandemic
Saurabh reflects on the challenges brought by the pandemic, such as remote collaboration and communication. He views the video series as a platform for professionals to connect, share knowledge, and learn from each other during these trying times. He emphasizes the mutual benefit of learning from one another and creating an enriching experience for all involved.
🧑💻 Intended Audience and Video Format
The intended audience for the video series includes software engineers and IT consultants working in the cards and payments space. However, anyone interested in the domain, such as those transitioning into the field, is welcome. Saurabh mentions the format will vary, with some short and focused videos and others covering topics in-depth. He will use general knowledge websites and occasionally create presentation decks to support the content.
💡 Exploring the Cards and Payments Industry Entities
Saurabh introduces the different entities in the payments and cards industry using the 'MANIC' model. The acronym stands for Merchant, Acquirer, Network, Issuer, and Cardholder. He explains the role of each entity: merchants accept payments, acquirers facilitate transactions, networks handle communication, issuers provide the cards, and cardholders are the consumers using the cards for transactions.
🏦 Deep Dive into Key Entities: Cardholder and Issuer
The cardholder is a typical consumer using a credit, debit, or prepaid card for daily transactions. The issuer is the financial institution that provides the card to the cardholder, often a bank. Saurabh mentions common issuers like Barclays in the UK and ICICI in India, explaining how they enable the cardholder to make payments in various situations.
🛒 Understanding the Merchant and Acquirer Roles
Merchants are businesses that provide services to cardholders, accepting payments through card transactions. The acquirer is the entity that manages the transaction for the merchant, taking money from the cardholder's account and depositing it into the merchant's account. Saurabh gives examples of acquirers such as First Data and Worldpay.
🌐 Role of the Network in Payments Processing
The network is the intermediary that processes the transaction between the acquirer and the issuer. It ensures that all communication happens smoothly, authorizing the transaction and facilitating the transfer of funds. Saurabh names Visa and Mastercard as examples of networks that enable seamless card transactions. He also touches on the messaging standards that govern how these transactions are processed.
📊 Recap of the MANIC Model and Key Players
In this final section, Saurabh summarizes the MANIC model, emphasizing the five key entities (Merchant, Acquirer, Network, Issuer, Cardholder) involved in processing payments. He explains how these entities collaborate to authorize and settle transactions. He encourages viewers to leave feedback and share the video series with others interested in learning more about the cards and payments industry.
Mindmap
Keywords
💡Cards and Payments Industry
💡Issuer
💡Acquirer
💡Merchant
💡Cardholder
💡Network
💡Transaction Processing
💡MANIC Model
💡Acquiring Transaction
💡Prepaid Cards
Highlights
Introduction to Saurabh Khandelwal, a manager in the artificial intelligence and analytics space working with data and reporting, particularly in the cards and payments industry.
Purpose of the video series: sharing knowledge gathered over years in the technical and functional domains of cards and payments.
Aims to collaborate, learn from fellow professionals, and discuss latest trends in data, reporting, and the cards and payments industry.
Focus on discussing best practices for delivering IT projects within the cards and payments domain.
Payments and cards industry falls under the banking and financial services domain, which also includes capital markets, consumer finance, loans, and mortgages.
COVID-19 pandemic situation has led to a new way of connecting with people through videos to share and learn from each other.
Video format: pre-recorded sessions aimed at software engineers and IT consultants, with Q&A through the comments section.
Plan to create a series of playlists covering both technical and functional aspects of the payments and cards industry.
Overview of the key entities in the payments and cards industry using the mnemonic 'MANIC': Merchant, Acquirer, Network, Issuer, and Cardholder.
Explanation of the 'Cardholder' as the end-user who holds a physical or virtual card for monetary transactions.
Issuer refers to banks or organizations that issue cards to customers, examples being Barclays or ICICI Bank.
Acquirer handles transactions on behalf of merchants and deposits the money into the merchant’s account.
Network (e.g., Visa, Mastercard) handles the communication and processing between acquirer and issuer for transaction authorization.
Breakdown of the role of each entity (merchant, acquirer, network, issuer, cardholder) in the real-time transaction process.
Conclusion: Invitation to ask questions or provide feedback through the comments section, and encourage others to learn about the payments and cards industry.
Transcripts
hello everyone welcome to my youtube
channel
my name is saurabh khandelwal and i'm a
manager in the artificial intelligence
and analytics space
with one of the leading i.t services
firm
i particularly work in the stream of
data and reporting
and the functional area that i am
keenly involved in is the cards and
payments
industry so
this is a bit of an introduction about
myself
okay here's the interesting question why
am i here why am i making this video and
putting this on my youtube channel so
this is all about
sharing some knowledge that i have
gathered
over the last few years working in this
domain
both in the technical as well as the
functional space
and i also thought that this would be a
good way to
collaborate and to learn with fellow
professionals
i also wanted to discuss some of the
latest trends
in the space of data and reporting not
just about data and reporting but
uh also functionally i wanted to talk
about what are the kind of things what
are the kind of
shifts that i'm seeing in the cards and
payments industry
i would also like to talk about some
best practices so again
this is all about you know delivering it
projects
within the cards and payments domain so
um
this is a huge domain you know you know
just like other domains
and other verticals for example
healthcare
or logistics hospitality
retail so this comes under the gamut of
banking and financial services and
banking and
financial services in itself is a huge
space right you've got capital markets
there then you've got
banking you've got cards and payments
you've got consumer finance and
loans mortgages and so on so forth it's
huge
so particularly within the banking and
financial services gamut
we're going to talk about cards and
payments in this series of videos
all right and last but not the least
well
you know we are all facing these trying
times dealing with the
pandemic sitting at home
trying to to collaborate with each other
trying to communicate with each other
beat your
colleagues your friends your families so
i just thought that this is a good forum
to
to connect with people whom i don't know
so far working in this industry
and um well we can have some fun
together i can learn some things from
you you can learn some things
from me and uh we can make this an
enriching experience for both of us
and i have a last slide here about
the format of these videos like i said
these videos
uh would be intended audience being
software engineers i.t consultants
in the cards and payments functional
domain
however anyone else who wishes to learn
about this domain is more than welcome
you know if somebody is trying to switch
over to
payments and cards domain or
is going to be assigned to one of the
projects in future say for example and
he wants to
get some knowledge this is a good place
there'll be short videos some of the
videos would be extensive i mean it
depends really
if there are topics that i feel that
would be better to just
cover in totality then maybe those
videos would be a little longer
but other than that the videos would be
off short duration right just just
enough
so that we can all digest that that
little bit of uh
information let's say a five minute or
ten minute video i'll be using some
websites and resource references again
uh i'll specifically be going with some
general websites some general knowledge
websites which
you know all of us have been using for
example i'll be using wikipedia
investopedia anything that is
generally available wherever possible
i'll try to create a small deck
so there'll be a series of playlists
both technical and functional in nature
i'll probably begin with the functional
aspects where i'll talk about the
payments in the card industry and what
the kind of different entities that you
see within this industry and then we'll
go
deeper and talk and learn more about
each of these
entities in detail we'll also take some
q a but since
at the moment these are not live
sessions so the live q a may
not be possible these will all be
pre-recorded videos
so what we will do is we can take up
some
q a in the comment section so feel free
to put in your comments
i'll try to address all the questions if
there's any feedback
if there is any thing that you would
suggest to help me to improve the
content of these videos
those are absolutely welcome so with
this my friends
um let's maybe get the learning going
i'll end this deck here and i'll quickly
give you an
overview of what we are going to cover
in these sessions
and then i'll end this first video there
and from the second video onwards we'll
start looking into each of those
those entities in a bit detail all right
so let's get going
we are here to talk about the
payments and
cards industry
okay so this is how you generally refer
this industry some
may be calling this as cards and payment
networks
payments cards they're all under the
same umbrella
this is the payments and cards industry
most of us
know about this industry if not say from
a learning perspective
but from a usage standpoint we all have
actually
been a part of this industry somewhere
or the other we all have used credit
cards debit cards
some sort of cards you know prepaid
cards vouchers
and things like that while uh making
transactions for a day-to-day needs
right so for example if you go to a
grocery store you make a payment
you use a card or for example when you
are
going to a patrol station to get you
to get the fuel up in your car you may
be using a card over there
so there are many places in your
day-to-day life
where you use a card to do certain
transactions
so now if we specifically talk about the
various
entities that are there in the payments
and cards industry
we can list them down into certain
buckets
you know so you would have a card that
is being issued by a bank
that's the issuer of the card uh you use
the card
in a grocery store the grocery store
is actually the merchant who is using
this card for you
and then you would also have
entities like an acquirer a network
which does the processing of the payment
and things like that
so if we talk about all of these
entities
and we want to just list them down
there is a very easy mnemonic that you
can use to
remember them in future so i'm gonna
write that down for you
it's called as manic okay it's the manic
model and the mnemonic manic that you
can use
to remember all of these entities used
in a payments and cards industry
now what does this mnemonic stand for
how do you expand this mnemonic right
this is an abbreviated form obviously
so how do you expand that well it's very
simple
some of you may have guessed it m is
actually nothing but
the merchant a is
your acquirer
n is the the network
i is your issuer
and c is your
card holder okay
so this is how you
define all of the entities within the
payments and cards industry
at a very very high level you have a
merchant
you have an acquirer you have a network
you have an issuer you have a cardholder
and this sky here sits in the middle
this is the guy which does the talking
on the two sides this side and this side
you have two entities the merchant
and the acquirer sitting on the one side
the issuer
the cardholder sitting on the other side
in the middle you have the network
that does the talking the communication
part of it
and does the processing of the payments
okay a little bit more about
these entities and so we better
understand them
at a high level of what they are well
let's start from the card holder
on your extreme right here right
who is this guy well this guy is
just an ordinary person with a card like
you and me
unless of course you happen to be the
owner of an acquiring
firm or the ceo of a bank well actually
ceos would also have their own personal
cards but then
you know just for the sake of it unless
you belong to any of these entities here
on the uh on the on the left of
c you would all be falling under this
entity called as card holder if you have
a card a physical card
or a virtual card that you're using for
your monetary transactions it's
people like you and me who form the card
holder
then comes the issuer okay as the name
says
this is the guy who issues the card for
the card holder
so so who's an issuer it's the
card issuing authority or
the kardashian organization
there could be some banks you know
there's so many banks for example
depends on which part of the world you
are in
if you are in uk you could probably
relate to something like a barclays
or an at west if you are in india you
could some relates up to
something like an icici um
or htfc or sbi so all of these are
issuers of the cards they issue the
cards for you which you then use
for your day-to-day purpose okay
now let's leave this here we'll talk
about
it at the end this guy here in the
middle let's look at these two here
okay so now let's shift on the on the on
the extreme left
and talk about merchant merchant is very
very simple
right as the name says this is the
merchant who is providing you these
services
so he is the
[Music]
services provider for you
typical examples could be grocery stores
um small merchants shops
brick and mortar shops online e-commerce
portals
these are all merchants of various kinds
okay
so as a card holder
you use the services of a merchant all
right
the merchant would would have their own
bank account right they would have their
own bank account
so if you do an online transaction or
you swipe the card
on a pos a point of swipe machine
at a merchant store then the money
automatically gets
deducted from your account and gets
credited to the merchant's bank account
so you would have the merchant would
have a bank account
associated right then let's talk about
the
the other entity on the right to the
merchant which is the acquirer
so
the merchant has the account where the
money gets deposited but the merchant
needs the services of a body
that handles the transactions on the
behalf of the merchant
so if i am a merchant let's see if i
have a grocery store
or if i have a departmental store i have
my bank account with say
a bank like barclays but then if a
customer comes to my shop
how am i going to take the payment from
him right
he has the card he would he would
present the card to me
and then i would take the card but then
how do i take the money from that card
and deposit into my bank account so
here is where the acquirer comes into
picture the acquirer
takes the money on behalf of the
merchant
right let me write it down here
it takes money
on behalf of
merchant
okay and then
deposits that into the merchants account
when the transaction
is settled okay so this is the role of
the acquirer
acquirer as the name says it acquires
the transaction it acquires the money
from the card holders account and then
deposits that into the merchant's
account okay
so that's the role of the acquirer
there are some acquirers that you can
read about you can do a little bit of
google the many acquirers some of the
renowned ones
for example there is an entity called as
first data
right very very popular a very famous
acquirer you can
you can read about that you can read
about world pay
another one so these are all the
different acquirers
again it depends what part of the world
you are so you have different set of
acquirers
then comes the network in the middle
right the network is the entity that
does the talking like i said in the
beginning
between the left side entities and the
right side entities
so the network is the guy
who tells the acquirer okay
now you have got to
make a transaction request on the behalf
of the merchant
give me all the details that you have
i'll take the details
i'll do the processing and i'll talk to
the issuer
and then eventually to the card holder
get the confirmation back okay get the
confirmation back
that everything is fine the transaction
is authorized
and then i will give you a confirmation
to transfer the money to the merchant's
account
lots of things handled by this entity
right so there's a lot of conversations
a lot of talking
all of this talking really happens with
the in the form of some messages
right there's various sort of messages
messaging systems
message messaging standards that are
being used
again there are certain bodies these
that govern these standards
we'll talk about these these bodies in
little detail in the forthcoming
videos but for now just remember that
this chap here in the middle is
responsible for handling the
the processing the transaction okay so
very important let's take some examples
here let so let me just write it down
here
network does the processing
the communication
okay then network
um talks both on the acquirer side as
well as on the issuer side
okay so typically in the payments cards
industry
an acquirer is in a shorthand written as
acq
in issuer is in shorthand written as iss
so wherever possible i'll try to stick
to the same formats
acq and iss so whenever i write acq i
mean an acquirer whenever
i write an iss i'd mean an issuer
for network i'd probably write n slash w
okay just to make it make it simple and
easy
and then let's take some examples here
for the network so you you would have
heard all of these names i'm sure you
know so you would have heard
names like visa you would have a name
heard of names like mastercard
and so on so forth okay
so these are the the networks
that provide that power the card of the
issuer
to to handle these transactions and
to ensure that the transactions they
happen successfully
so that at a very very high level is the
manic model for you
and the five entities that are
responsible for
a real-time transaction to be authorized
and the money
being settled across the accounts for
the parties
i hope you enjoyed this video
if you have any comments or any feedback
like i said please put that in the
comment section any questions that you
have
i'm happy to take all of those questions
please also let your
your friends or anyone else who's
interested to learn about this industry
in a little bit more detail
you can just pass on these links to him
or her
so that they can also benefit out of
these videos
okay so i'll see you all in the next
video then
happy learning thank you
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