SMS Vs DMS

I swipe my Credit Card at POS terminal, it took two days for reflecting the balance on my card account. On the same day I have performed a transaction using my Debit Card at ATM machine and the balance got impacted immediately. Why we have difference in both transaction processing? How does it work? 

This happened due the different messaging system used by the associations. Most of the associations are using SMS and DMS both for Transaction processing.

Single Message System and Dual Message System these are the two ways for processing the card payment transactions.

In Dual Message System we first get authorization transaction from the association, on the approval of this transaction issuer can block card holders Open To Buy (OTB) only. At the end of processing day or the cut off time defined by association, issuer gets another message in form of clearing file. On the processing of this file issuer will impact the balances of card holder and release the blocked OTB.

SMS Vs DMS

If we talk about Single Message System, we get only one message (Authorization) from association and on the approval on that message we impact the accounts balances itself. So in this case issuer will not get any other message for creating the transaction. In case of SMS issuer usually got a reconciliation file at the end of the day for reconcile their transactions. 

VISA DMS transactions supported by Base I and Base II messages. MasterCard DMS transactions are supported by Authorization and IPM Clearing Messages.

In SMS Base I messages is supported by VISA and in MasterCard supported Authorization messages for SMS.

All ATM transactions are uses SMS type of messaging as they are PIN base transactions.

It's not necessary that acquirer and issuer should be using same messaging system of association for transaction processing. It is a possible scenario where Acquirer is supporting the SMS messaging and issuer is supporting the DMS messaging or vice versa. In these cases association convert the transaction SMS to DMS or DMS to SMS.

Both messaging system support all type of authorization transactions i.e. Pre-Auth and Completion. 

Comments

  1. Unknown12 December 2021 at 19:34

    Excellent way of presentation !!! Keep it up .

    ReplyDelete
  2. Neeraj Singh29 December 2021 at 05:29

    You have explained this concept in a very simple language..Thank you.

    ReplyDelete

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