Intelligent authorisation for innovative card programmes

In business, we’re all looking for efficiencies in time and money. Saving both of these precious resources adds value to a company and improves team productivity. Alongside this, we expect the systems we deploy to be reliable. Indeed, in my previous blog I talked about the importance of choosing a payment processing partner capable of achieving consistent platform uptime.

Naturally, there is much more to a platform than solid uptime stats.

Take for example transactions. Card programme owners benefit when certain processes are automated, real time data is provided and they’re empowered to add functionality to the authorisation process. Perhaps the easiest way to explain this is if I walk you through the components of a transaction with the Marqeta platform, describing the superior level of control card programmes can exert over an authorisation.

We think it’s important to start by adding value from the outset. If you’ve not heard of ISO 8583, it’s a 30-plus-year-old legacy scheme messaging protocol and it’s an unavoidable part of the card payments landscape. If you’re going to be authorising transactions from Visa and Mastercard you will be working with the ISO 8583 messaging format. In short it can be a bit of a headache.

From a developer’s perspective, integrating ISO 8583 into card programmes takes precious time. That’s because it’s difficult to understand and of course there are occasional scheme updates that need to be accounted for. But there’s a simple way around this. Marqeta converts ISO 8583 to a JSON message format, completely removing the need to build an integration. In my opinion, it’s much better if innovators are able to focus their efforts on building a compelling customer proposition than spending time figuring out legacy technology integrations. Think of the impact this could have upon the success of your card programmes.

In our sector, fraud is unfortunately inevitable. That’s why I want all our partners to be on the front foot when it comes to tackling fraud. We start by offering a proprietary 3D secure solution that allows card programmes to participate in transaction decisioning. This is unique and also beneficial to those who may have built their own fraud decisioning engine as this data can be employed right at the outset.

Additionally, at the front end of the transaction authentication process, our proprietary algorithmic fraud engine, FraudStream, marks transactions with a real-time likelihood-of-fraud score of between one and ninety-nine and a recommendation of whether to accept the transaction or not.

So, we’ve made it quick and simple for payment card innovators to connect to the payments network and we’ve put in place robust tools to protect you and your customers from fraud. Let’s have a look at what’s possible within the transaction itself.

Critically, dynamic spend controls make it possible, among other variables, to place limits around the time, amount and location where funds on a card are spent. Kicking in before a transaction progresses through the platform for authorisation, these controls are configured by API in real-time. They offer a virtually limitless number of configurations allowing a tailored approach at individual card level.

Once a transaction has passed dynamic spend controls and FraudStream, we’re now able to authorise on behalf of a card programme or, if they prefer, involve them directly in the decision using Marqeta’s Just-in-Time (JIT) Gateway functionality. This gives card programme owners the ability to approve or decline using real-time business logic.

Historically, transactions have needed to complete in fractions of a second due to technology constraints, but at Marqeta we think there’s scope for longer authorisation – a whole three seconds, in fact. In the first instance this reduces the risk of a transaction timing out, which we know leads to frustrated cardholders and lost revenue for programme owners.

Extending the time to authorise a transaction also creates an opportunity for innovation to benefit the user experience. With a few additional seconds you can add a world of functionality that will make your card programme stand out. For example, you might want to apply additional fraud rules, deduct loyalty bonuses from the purchase price, or even authorise according to the location of the cardholder.

Once a transaction decision has been made, it’s beneficial to inform your customers. You might want to notify them about the reason for a decline, the fact that a purchase has been made (from a fraud prevention perspective), or simply to help them understand their spending habits. All of this is typically done in an app. The overarching trend in payments is for real-time information and I think card programmes that deliver the best real-time user experience will be the ones that succeed.

Marqeta ensures a real-time experience through webhooks, which facilitate the exchange of cardholder events and enable card programmes to react quickly in accordance with their customers’ needs.

A further time saving made possible by our platform is the automatic matching of original authorisation messages with subsequent clearings, reversals, refunds and chargebacks. There should be no need for a manual process for this activity, nor should you as a card programme owner have to invest resources in building a matching algorithm. Marqeta has done it for you. You focus on growing customers and we’ll take care of administrative tasks like full and part chargebacks and refunds.

A Programme dashboard to manage your day to day activity and Data Insights to inform your strategyOur Programme Dashboard is a single application to efficiently serve all your programme administration and management needs throughout the entire customer journey.

Underpinning our rich transaction functionality is the Marqeta Data Insights tool. This is an extensive data hub – the insights it provides enable card programme owners to refine their offerings for a better user experience. How does this work? Well, one example applies to commercial cards. Data across your cardholders can show how, when and where they are spending their funds. This opens up opportunities to track trends and partner with merchants for promotions or interest discounts. A truly tailored experience – but this is a blog for another day.

I hope this overview of transactions, the Marqeta way, provides an idea of what is possible when you apply technology to reimagine card payments. The tools we use have allowed innovators to bypass long-standing pain points in the payments process and focus on delivering next-generation card products. Rest assured the rich functionality discussed above will continue to evolve – it’s what we’re passionate about.

However, I’d love to know what challenges you would like to see Marqeta address next in the payments process. Get in touch with us today and let me know.

Alternatively, if this has got you interested in what we do, take a look at these resources for developers.