E-payment processing

Click here to download the guide: “E-payment”

 

5 entities participate in the processing of the online transaction:

  • E-merchant (seller),
  • Buyer (the end user who performs the transaction),
  • Accepting bank, i.e. “acquirer” (a bank with which the e-merchant cooperates),
  • Card organization (Mastercard, Visa, Diners, etc.) and
  • Issuing bank, i.e. “issuer” (the bank – the issuer of the end buyer’s card)

For the accepting bank to process the online transaction, a payment gateway and a payment processor are required.

The payment gateway is the portal through which the accepting bank (merchant’s bank) receives the customer’s card data for further processing.

The payment processoris a technical tool that is an intermediary between the banks and the international card organization (Visa, Mastercard, etc.) to carry out online transactions. The payment processor can be owned by the bank (in-house) or the bank can use an external payment processor. The processor sends clearing data to card organizations to settle funds from card transactions.

Important notice

The e-merchant does not have any insight into the data from the buyer’s payment card. The same is transmitted through the payment gateway directly to the accepting bank – the merchant’s bank, which then through the payment processor (own or external) transmits the information to the card organization that communicates with the customer’s card issuing bank.

Click here to download the guide: “E-payment”

 

Online transaction clearing and settlement

Clearing is the exchange of transaction information between the merchant’s bank and the card-issuing bank, through the card organization’s Visa or MasterCard.

Settlement is the process of exchanging funds between the card issuer and the merchant’s bank to complete the transaction.

Card transaction clearing and settlement is facilitated through the Transaction Data Exchange, which is the electronic infrastructure that Visa and MasterCard have put in place to process financial transactions between their member banks. Clearing and settlement of the transaction occurs subsequently.

The settlement process may vary slightly from one processing bank to another, but generally goes through the following stages:

  1. After the end of the business day, the merchant’s bank submits the transaction information to the appropriate card organization (Visa or MasterCard).
  2. The card organization clears and settles and sends the transaction information to the card issuing bank and then settles it by crediting the merchant’s bank account and debiting the card issuer’s account.
    1. The amount credited to the merchant’s bank is equal to the amount of the transaction, minus fees and minus the commission (the fee that Visa and MasterCard charge for processing each card transaction).
    2. The amount debited from the card issuer’s account is equal to the transaction amount, minus chargeback fees determined by Visa and MasterCard.
  3. The merchant’s bank receives its funds, usually within 24 hours of the transaction, and credits the merchant’s account, usually within 48 hours of the transaction. The e-merchant receives an amount equal to the amount credited to the account of the bank processing the transaction, minus payment processing charges (the rates and fees the merchant has agreed to pay for card processing services).
  4. The card issuer informs about the transaction made on the cardholder’s account.

Success stories from other CEFTA members

Serbia
North Macedonia
Albania
Kosovo
Bosnia and Herzegovina
Moldova

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Montenegro has the lowest population of all CEFTA markets.

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Legal disclaimer: This geographical map is for informational purposes only and does not constitute recognition of international boundaries or regions; GIZ makes no claims concerning the validity, accuracy or completeness of the maps nor assumes any liability resulting from the use of the information therein.

North Macedonia

Population 2057680
Population ages 16-64 13992.22
Internet use 85.3%
Internet shoppers 53.5%
Currency Macedonian denar
GDP per capita, PPP 21304.5

Albania

Population 2777690
Population ages 16-64 1861052
Internet use 83.1%
Internet shoppers 38.5%
Currency Albanian lek
GDP per capita, PPP 19496.20

Serbia

Population 6664450
Population ages 16-64 43318.93
Internet use 85.36%
Internet shoppers 64.18%
Currency Serbian dinar
GDP per capita, PPP 25061.9

Kosovo

Population 1761980
Population ages 16-64 11981.46
Internet use 90%
Internet shoppers 51%
Currency European euro
GDP per capita, PPP 14971.20

Bosnia & Herzegovina

Population 3233530
Population ages 16-64 21664.65
Internet use 83.38%
Internet shoppers 41.31%
Currency Bosnia and Herzegovina convertible mark
GDP per capita, PPP 20950.20

Moldova

Population 2538890
Population ages 16-64 17264.45
Internet use 76%
Internet shoppers 34%
Currency Moldovan leu
GDP per capita, PPP 15719

Montenegro

Population 617210
Population ages 16-64 4011.87
Internet use 88.36%
Internet shoppers 32.13%
Currency European euro
GDP per capita, PPP 28324.6

Resource and information center on key aspects of e-commerce for all CEFTA members.

ECOMMERCE FOR ALL

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Overview of the E-commerce Data for the CEFTA region.

Business Facts Indicators for E-commerce readiness Internet Use, E-shoppers and Digital Skills Categories of Online Shopping Internet Activities
View all e-commerce data
* This designation is without prejudice to positions on status and is in line with UNSCR 1244 and the ICJ Opinion on the Kosovo declaration of independence.

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