ISO8583 Authorisation & Clearing
The main objective of the Berlin Group ISO8583 Authorisation & Clearing standards was to enable a true unbundling of card schemes and processing activities, as required for providing efficient SEPA card payment services to the market. To enable card scheme-independent processing of transactions between issuers and acquirers, the Berlin Group needed to develop scheme-independent message standards for this interface. Based on these considerations, the Berlin Group has defined a functional and technical architecture with a common set of authorisation and clearing standards for the interface between the acquirer host and the issuer host, which is independent of a specific card scheme, and has taken into account the requirements of the SEPA region for card processing as identified by the EPC. The standards would also allow an easy entry of new payment schemes into the European market, thus contributing to competition in the field of payment systems.
The Berlin Group ISO8583 Authorisation & Clearing specifications describe the acquirer-to-issuer interface for debit and credit card processing services at POS, ATM, e-payments and MOTO as identified within the EPC Cards Standardisation Volume.
In detail, the ISO8583-based specifications support the following EPC Cards Standardisation Volume services: ATM Cash Withdrawal, Balance Inquiry, Cancellation, Card Validity Check, Cash Advance (attended), Combined Funds Request/Top-up, Deferred Payment, Funds Request for Top-up, Issuer-initiated referral, No Show, Original Credit, Payment, Payment with Cashback, Payment with deferred Clearing, Payment with Increased Amount, Payment with purchasing or corporate card data, Pre-Authorisation Services (Multi Step Payment), Quasi Cash Payment, Recurring Payment, Remote Payments, Refund and Unsolicited Balance Information. The clearing interface supports presentments, chargebacks, fee collection for services, reconciliations, message rejections and file rejections.
The Berlin Group has worked closely with the ISO community (ISO TC68/SC7/TG1) to harmonise AES integration. On 8 July 2019, a new version 3.2 of the ISO8583 Authorisation specifications was published on the website, including AES and optional integration of card data encryption.
Interchange fee settlement was integrated into the presentments. For clearing, rules have been defined for the technical processing, for example, D+0 settlement and rejection rights. Other aspects of clearing processing, such as presentment periods or chargeback reasons, are defined as default rules. Moreover, procedures between back offices, like additional information for dispute management, have also been standardised. The settlement is performed once a day, normally using Target 2. Settlement is performed between the gateways, on behalf of their respective acquirers and issuers. The detailed processing rules can be found in a dedicated clearing and settlement rule book.
Implementation levels have varied over the years due to changing business conditions. Seven European processors consistently support gateway implementations based on the Berlin Group ISO8583:1993 standards.
The standards enable a true unbundling of card schemes and processing activities for efficient SEPA card payment services.
You can download all ISO8583 Authorisation & Clearing documents here.