Introducation
In order for Lead to appropriately fund the network settlement account, we require daily network settlement reports for each network the BIN is active on. These reports then drive the respective funds flows outlined in the below diagrams.
DrawdownsNetwork drawdowns and reports can be aggregated across BINs of the same type. For example, two debit BINs can be funded together, but credit and debit/prepaid BINs must be separated at the reporting level in order for Lead to perform the below funds flows.
BIN Settlement
Debit/Prepaid
The above process of steps marked 1.* is repeated twice, once for the primary network and again for the secondary network.
Credit
The above process of steps marked 1.* is performed once per day based on the network settlement report; subsequent steps then depend on other inputs.
Push-to-Card
In general, push-to-card has the same funds flow as a Debit/Prepaid BIN (net funds outflowing from a source of funds). There will be differences around accounts that are involved and your implementation team will provide additional details.
Network Settlement at a non-Lead Bank
If the BIN and program are configured to settle transactions in local currencies (e.g. GBP transactions settle in GBP as opposed to the equivalent USD), then the data requirements are the following:
- Network settlement data reflecting the non-USD currency activity in each relevant currency
- However, Lead will not be performing these funds flows and require this for oversight
- Transaction data that reconciles to the non-USD currency as well as the USD currency
- This will be in the form of settlement_amount and settlement_currency being required fields
Please reach out to our implementations team for more details.
Report Data Points
In order to perform the above funds flows, the daily network settlement report is parsed to populate these values, which are then used to move the funds from one account to another.
| Data Point | Description | Debit/Prepaid BIN | Credit BIN |
|---|
| Transaction amount | Gross sales | The amount totaling transaction amount minus refund amount is taken from the source of funds, typically an FBO | Funded from Lead-owned funds as these are loans |
| Refund amount | Gross returns | Included in above | Remitted to the client for collections purposes |
| Interchange amount | Net interchange sent from the network | Interchange revenue is remitted from the network settlement account to the client per the contract | Interchange revenue is first remitted to Lead as owner of the related receivables and then sent to the you per your contract |
| Dispute amount | Net chargebacks sent from the network | Funds related to disputes are sent to the appropriate account for dispute management | Same as Debit/Prepaid |
| Fee amount | Net fees charged by the network | Fees charged by the network are passed on to the client per the contract | Same as Debit/Prepaid |
Timing and Workflow
Lead receives network settlement reports for all applicable networks, then Lead will perform the necessary funds flows as described above (e.g. if a debit card program has Visa as the primary network and Maestro as the secondary network, then Lead will fund network settlement once both files are in place for a given day). Typically, the issuer processors deliver these reports in the morning to Lead via SFTP, where each network will have its own folder for receiving reports.
From a processing standpoint, network settlement funding happens independently of any other workflows at Lead. This means that Lead will process network settlement files regardless of what other data is shared in order to ensure networks receive funds on a timely basis. There is also no T-1 dependency on network settlement files, meaning if files for network settlement on T don’t appear, but all of them appear on T+1, Lead will still process network settlement entries on T+1.
Weekend Behavior
While reports are sent every calendar day, funds only move to the network every business day. In practice, this means that Lead will process reports everyday, and then perform funds flows that same day if it’s a business day, otherwise the next business day.
Example
| Transaction Day | Report Day | Settlement Day |
|---|
| Monday | Tuesday | Tuesday |
| Tuesday | Wednesday | Wednesday |
| Wednesday | Thursday | Thursday |
| Thursday | Friday | Friday |
| Friday | Saturday | Monday |
| Saturday | Sunday | Monday |
| Sunday | Monday | Monday |
The above table is for illustrative purposes only and assumes the network’s transaction window perfectly aligns with the day’s 24hr period.
On Monday, three days worth of transactions will be requested from the network in a single drawdown. Lead, however, will process each day separately on Monday. From a cashflow perspective, there is no difference, but from a funding perspective, it will appear as three individual steps (one for each day).
