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Merchant-Acquiring-Business-Products- FAQ

What is Merchant Acquiring Business (MAB)?

MAB is primarily referred to as the mechanism of providing necessary infrastructure and facilitating payment for goods and services purchased through Debit/Credit Card, UPI, Aadhaar Enabled Payment System (AePS) etc.

Who are the various stakeholders in MAB?

Issuer: The Bank that issues cards.
Cardholder: Customer / Non customer using card for making payment.
Merchant: Entity which accepts payments through cards.
Acquirer: The Bank that provides necessary infrastructure to the merchant to accept payment, maintains relationship and facilitate acceptance payments thru cards.
Intermediary Agency: Visa, MasterCard, Rupay Debit and Credit Cardswho facilitate interbank settlements.

What are the important terms used in MAB?

Merchant Discount Rate (MDR): The commission charged by the acquirer (PNB) to the Merchant (Trader/Service Provider). It is also termed as Merchant Service Fee (MSF).
Interchange: The incentive paid by the Acquirer Bank to the Card Issuer Bank for promoting payment through cards.
Scheme Fee: The service fee paid to intermediary agencies i.e. MasterCard or Visa for facilitating interbank payments.
On -Us Transaction: Where issuer and acquirer is same (e.g. PNB Debit Card on PNB POS terminal)
Off-Us Transaction: Where issuer and acquirer are different (e.g. other bank’s debit/credit card on our POS terminals.)

What is interchange and authorization Fees?

Interchange fee: The incentive paid by the Acquirer Bank to the Card Issuer Bank for promoting payment through cards.
Authorization Fee / Scheme Fee: The service fee paid to intermediary agencies i.e. MasterCard, Visa and NPCI for facilitating interbank payments

What is Batch Settlement and Charge-slip?

Batch Settlement: Closing of Daily Transaction and Generation of transactions reports.
Charge – Slip: Charge slip refers to the voucher printed on the POS machine after swiping and charging a debit or credit card.

How MAB is beneficial to Customer and Merchant?

Cardholder

  • Need not carry cash, which is risky.
  • Maintains higher balances in the account resulting in higher interest on deposits.
  • Saves time and money in visiting bank branch / ATM to withdraw money and spend the same at merchant outlet, who has to again deposit the same in Bank.
  • The time saved results in lower cost and higher productivity as time saved can be gainfully utilized.

Merchant

  • Cash handling is avoided.
  • The customers have tendency to higher purchases/impulsive buying while using the card than cash, thus more sales and higher profits.
  • The customer loyalty to merchant increases due to the facility.
  • The facility can also have provision for customer loyalty points which are widely used to attract the customer to the outlet repeatedly.
  • Additional revenue stream from value added services such as Cash@POS.

What are the pre-requisites for signing the Merchant?

  • Opening of account for settlement of transactions with PNB.
  • KYC Compliance. Merchant needs to provide necessary documents regarding the proof of business, address proof, photo identity proof of the proprietor/partner/key promoters etc

What are the Do’s and Don’ts for merchants?

Do’s

  • Merchants must accept all cards when properly presented as payments for transactions.
  • Bring to the notice of the bank any fraudulent activities.
  • In case of any problems with the machine, call the PNB helpline number or other Circle-wise numbers given.
  • Verify the card holder’s signature with the one below the strip of the card

Don’ts

  • Merchant must not disclose details of the card or cardholders to any third party.
  • Impose any extra charge or surcharge (unless expressly allowed by local law).
  • Indulge in any fraudulent activity.
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