Following members participated in the E-panel knowledge sharing discussions:
- Mr. Aneesh Khanna, Executive Vice President – NSDL Payments Bank
- Mr. Ajay B Panicker, CEO & Founder, Netpay Limited
- Mr. Pratap Ghosh, Head Liabilities Product Group, Bandhan Bank Ltd
- Mr. Ashok Kumar, General Manager – IT, Karur Vysya Bank
- Mr. Anuj Khosla, Country Head Union Pay International
- Mr. Muthu Krishnan, General Manager – Merchant Acquisition, India Transact Services Ltd
- Many other CEO/CXO Bankers & Fintech professionals on FIAKS Forum
FIAKS Community Question
The complexity of the Indian card processing – Confusion between POS Aggregator, Payment Facilitator, Gateway, Master Merchant, BIN sponsorship?
FIAKS Community Discussions
POS Aggregator term was recently used in FIAKS community and confused many seasoned bankers and fintech professionals. We realized that this is the latest buzzword and was extensively discussed and debated in the FIAKS community of CEO/CXO bankers, fintech, payments, and e-commerce professionals. Finally, we could get the following as a definition of POS aggregator.
Let’s first understand a few fundamental terms before we get into understanding POS aggregator.
What is BIN (Bank Identification Number)? As per the FIAKS Community experts, the bank identification number is the first four to six numbers that appear on a card. The bank identification number uniquely identifies the institution issuing the card. The BIN number helps in matching transactions to the issuer of the card. The card can be gift cards, debit cards, prepaid cards, etc.
What is a Master Merchant? As per the FIAKS Community experts, under this arrangement merchant sourcing is done by POS Aggregator directly and merchant risk is borne by them unlike merchants acquired directly by the bank for POS where risk will be borne by the bank and only terminal sourcing and field support to be taken from a terminal vendor.
What is POS AGGREGATOR? POS terminal issued by a company has a proprietary software which supports onboarding of multiple acquiring BINs (of different acquiring Banks) on a single terminal. Big Retail outlets like Big Bazaar, Shoppers Stop, Lifestyle, etc. normally use such POS terminals as issuer-specific offers which are typically linked if the card is swiped on their own terminals is taken care by this technology. To the merchants, the POS terminal company pitches that it will route the transaction through the acquiring BIN of the bank charging minimum MDR. This can offer the company to use its discretion to route the majority of the transaction through its preferred Acquirer.
As per the FIAKS Community experts in Banking, fintech, payment, and e-commerce; many POS terminal providers today don’t have the functionality of hosting multiple BINs on a single terminal.
The existing jargon for the POS Aggregator is Payment Facilitators. The other jargon for the Payment Facilitator model is a BIN Sponsorship. Payment Facilitator is a well-established business model in the west and emerging business model in India for the last few years. The facilitator is the technical term used by Visa and Mastercard.