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CRITICAL RIVIEW OF CREDIT CARD TRANSACTION SYSTEM
Md. Razib-Al-Hasan Khan
INDEPENDENT UNIVERSITY, BANGLADESH
December 2004
CRITICAL RIVIEW OF CREDIT CARD TRANSACTION SYSTEM
by
Md. Razib-Al-Hasan Khan ID: 0020334
An Internship Report Presented in Partial Fulfillment of the Requirements for the Degree
Bachelor of Science in
Computer Science
INDEPENDENT UNIVERSITY, BANGLADESH
December 2004
Internship
CRITICAL RIVIEW OF CREDIT CARD TRANSACTION SYSTEM
by
Md. Razib-Al-Hasan Khan ID: 0020334
has been approved
December 2004
_______________________ Mr. S. J. Ahmed
Lecturer School of Communication
Independent University, Bangladesh
Abstract:
During the last decades the world changed greatly because of rapid exchange of
information. Through telecommunication and network the world became a smaller place
as people can send or receive information from one end to the other within a second.
The main purpose of exchanging information is trading and commerce. In a nut shell the
globalization of world business evolved.
The business through Internet is generally known as e-business or e-commerce.
According to Forrester Research (as cited in Kessler, 2003), electronic commerce
generated sales worth US $12.2 billion in 2003. This statistics indicates the vast
popularity of e- business venture in recent days.
As the security of electronic transaction was ensured the usage of electronic card
increased remarkably. Electronic fund transfer guaranteed easy and reliable transfer of
money world wide.
One of the world's leading electronic payment brands is Visa. There are more than one
billion Visa cards in circulation, which are accepted in 150 countries throughout the
world.
Bangladesh is one of the countries where electronic payment system is available. Master
Card and Visa are the two leading brands existing in our country. For instance financial
institution such as Premier Bank issues Visa credit card. Now a days the number of credit
card holders are increasing as different kinds of financial institutions and shopping malls
in the major cities are providing the facility of paying money through credit cards. The
safety and ease of carrying credit card is the main reason behind using it.
iv
ACKNOWLEDGMENTS
This is my humble attempt to present gratitude in preparing this report. I have truly
drawn upon my own experience as a student of computer science. This project would not
have been possible without the dedicate ions and contributions of a number of
individuals.
First and foremost, I would like to express my gratitude to Mr. S. J. Ahmed for agreeing
to supervise me during the internship project. His eagerness helped me in every step of
the way and encouraged me to propel myself higher.
Then I want to show my gratefulness to the staffs of Premier Bank Limited. Specially to
Mr. Zahid and Mr. Shamsul Huda for their continuous and cordial support during my
internship.Special thanks to Dr. Indrani Haque for sparing her valuable time to read my
report and providing valuable feedback to update it.
Lastly, I thank to Independent University, Bangladesh for providing me with such
opportunities to work and gain experience of the professional field and writing formal
report like this.
v
TABLE OF CONTENT
Chapters Page INTRODUCTION………………………………………………………………. …1 Origin of the report…………………………………………………………………2 Objective of the report………………………………………………………………3 Limitations…………………………………………………………………………..3 COMPANY PROFILE……………………………………………………………...4 The company overview……………………………………………………………..4 Working platform of premier bank………………………………………………….5 Mission of the bank…………………………………………………………………6 Goals……………………………………………………………………..………….6 Objective ………………………………………………………………………........7 METHODOLOGY ………………………………………………………………….8 Interview …………………………………………………………………………….8 Questionnaires ……………………………………………………………………....9 Observation ………………………………………………………………………....9 System design ……………………………………………………………………….9 CRITICAL ANALYSIS ……………………………………………………………11 Electronic commerce ……………………………………………………………….11 SYSTEM STUDY …………………………………………………………………16 Credit card policy of premier bank…………………………………………………16 Credit card application form collection procedure………………………………….23 Marketing approach ………………………………………………………………..26 Advertisement………………………………………………………………………26 SYSTEM ANALYSIS……………………………………………………………...27 Transaction processing system through POS………………………………………32 Example of transaction processing system…………………………………………33 Clearance part of the TPS…………………………………………………………..33 CONCLUSION…………………………………………………………………….35 REFERENCES……………………………………………………………………..37
vi
LIST OF FIGURES
Figures Page
1. List of DFD symbols….……………………………………………….. 10
2. Application collection procedure……………………………………… 23
3. Rich picture of card production and delivery…………………………... 24
4. Organogram of credit card division …………………………………… 25
5. DFD of transaction processing system (Base I: context level)..………...27
6. DFD of transaction processing system (Base I: system level)…………..28
7. DFD of transaction processing system (Base II: context level) ………...29
8. DFD of transaction processing system (Base II: system level) ………... 30
vii
1. INTRODUCTION
Overview of Internship: Independent University, Bangladesh offers a 12 credit course as Internship for the
graduating students in her course curriculum. The curriculum requires every student
to do an internship in a reputed firm for hands on experience about the professional
works. It is a practical exposure of theoretically gained knowledge and can be
considered as a preliminary trial to be acquainted with any organization and to make
oneself confident enough to enter into service life and start building career. As the
outside world is very much competitive for anyone after graduation, IUB provides
such an opportunity to build up the capability with most appropriate opportunities.
This gives the student great opportunity in the service world and also to get exposure
to various diversifications of the service world. Intern students are supervised under a
particular faculty member throughout their Internship stage. Here the student gets the
chance to apply his theoretical knowledge and practical skill that he has gained in the
entire under graduation student life. They are responsible to report weekly or
fortnightly to his/her respective Supervisor to get his/her assistance. And the project
gets advancement by following the Supervisor’s instruction. The internship period is
for at least 3 months. After that the student submits a report on his project work,
which reflects his knowledge gained in the entire B. Sc. course. That is the main
purpose of this report to give an outline of the outcome of internship during the entire
period of the course in the company.
Purpose of Internship
In our study period mainly we gain theoretical knowledge but now a day, in the job
market is no substitute for principle work experience. Getting meaningful work
experience in one’s major field of study or career interest should be a number
priority a vital par of college education. Today students with career related work
experience is getting the best interviews and job offers. The major targets to o
Internship in IUB are as following:
This is the beginning of a student’s professional career.
The student’s competency and efficiency in the working environment can
assessed from this course
Teaches the student to take up the responsibility and pressure of work
Teaches the student to learn from work
To help students enhance their creativity and efficiency in dealing with projects
related to their field of study.
To evaluate the person’s ability to communicate and under pressure, if required
Helping students to express dependability, initiative, resource fullness and
professionalism in the tasks they are assigned.
To increase the confidence level of IUB students, which would help them w
after graduation.
1.1 Origin of the report:
This report has been prepared as a requirement of the internship program. The rep
was based upon the organization Premier Bank Limited. My organization superv
was Mr. Md. Abdul Wali, Senior Vice President and Head of Credit Card Divis
and my institution supervisor is Mr. S.J Ahmed, Assistant Professor, School
Communication, Independent University. The topic, which was decided for doing
report, was duly approved by my institute supervisor. The report will give the i
2
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ffer
be
.
ork
ort
isor
ion
of
the
dea
3
about credit card processing system and transaction processing system in premier
Bank.
1.2 Objective of the Report:
This literature is written on the Credit Card Division in Premier Bank Limited in
Bangladesh. Apart from the overall organization part of Premier Bank Limited (PBL),
the project part is divided into two phases. On the first phase, it is focused about the
credit card policy of the premier bank. In that phase it is described about the organ
gram of Credit card division. From the collection of application, data capture, card
delivery etc described in this part. On the next phase, it is focused about the
Transaction processing system on credit card system. That means how the transaction
is done through POS machine or ATM that is tried to be described in this part.
1.3 Limitations:
• The main limitation is information, which was the confidential to the
company, as not exposed for the security of their own network.
• It’s difficult to functioning properly as a student to work a large company’s
database.
• It is rather impractical to learn about their total information technology, this
short time. So that’s why there is some lacking regarding some topics of the
project.
• Sometime the officials of the organization not assist me properly because they
might be too busy at that moment.
2.0 COMPANY PROFILE
2.1 The Company Overview:
The Bank was incorporated in Bangladesh as Banking Company under Companies
Act, 1994 as a public Limited Company. The Bank stared its operation as on 26th
October 1999.They are also working actively to set tip new Braches in different prime
locations prime locations to ensure their presence closer to their customers.
Head office:
The Premier Bank Limited
Iqbal Center (4"' floor)
42, Kamal Ataturk Avenue
Banani Dhaka-1213.
Bangladesh.
Premier Bank in Bangladesh
The network of Premier Bank in Bangladesh includes:
10 branches in Dhaka city
1 branch in Savar DEPZ Gate
1 branch in Narayangonj
2 branches in Chittagong
1 branch in Khulna
1 branch in Sylhet
1 branch in Barishal
1 branch in Brahmanbaria
2.2 Working Platform of Premier Bank
The organization uses different types of hardware components including Br
Compaq PCs, IBM Servers and HP Printers. They use standard monitors as
screen.
The software used by the Premier Bank can be categorized into three br
categories:
System software: The PCs are equipped with the Microsoft’s Windows 2
professional operating system. All PCs are connected with a central ser
from where they get access to different application software.
Database software: They have their own database software named “Prime”.
Reporting tools: The reporting tool used by the Premier Bank is Seag
Crystal Report.
All computers are attached with the network. A central server controls all secu
information and authentication information of the users of the PCs, as well as,
databases is kept in different servers. They use Lotus Notes for their internal mail
system.
The Premier Bank has 20 branches all over the Bangladesh. These Branches
mainly situated in divisional city. The Board consists of 13 (thirteen) Directors. T
members of the Board of Directors of the Bank hold very respectable positions in
society. They are from highly successful group of business and Industries
Bangladesh. Out of 13 members one is from Taiwan. Each member of the Board
Directors plays a significant role in the socio-economic domain of the country.
5
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the
oad
000
ver
ate
rity
the
ing
are
he
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6
2.3 Mission of the bank:
• To be the most caring and customer friendly provider of financial services,
creating opportunities for more people in more places.
• To ensure stability and sound growth whilst enhancing the value of
shareholders investments.
• To aggressively adopt technology at all levels of operations to improve
efficiency and reduce cost per transaction.
• To ensure a high level of transparency and ethical standards in all business
transacted by the bank.
• To provide congenial atmosphere which will attract competent work force
who will be proud and eager to work for the Bank.
• To be socially responsible and strive to uplift the quality of life by making
effective contribution to national development.
2.4 Goals:
• To grab the maximum relative market share in the industry to compete with
the Standard Chartered Bank.
• To achieve highest growth rate in the industry in terms of Asset, Liability and
Profit.
• To mobilize the highest volume of Low Cost Deposit.
• To build-up most efficient, skilled, competent and motivated human being.
7
2.5 Objective
The objective of this project was to analysis the transaction processing through credit
card. Some specific formalized steps were followed for this analysis.
Depending on my internship period, I have divided my project schedule to track the
efficiency and control of my project. I have used Gantt chart for my project
scheduling. The Gantt chart is shown below.
August September October November
1st
week
2nd
week
3rd
week
4th
week
5th
week
6th
week
7th
week
8th
week
9th
week
10th
week
11th
week
12th
week
Observation
System analysis
Figure 2.1: Gantt chart for Project Schedule
3.0 METHODOLOGY:
Methodology is a systematic description of the sequence of activities required to solve
a problem. In other words Methodology is a collection of procedures, techniques,
tools and documentation aids, which help the system developers in their efforts to
implement a new information system.
System design:
Process Model
• Data Flow Diagram (DFD)
3.1. Interview:
Interviews are formal meetings where the Analyst can obtain information about the
operations of the present systems and the requirements for the new system. This is the
most common and best method for getting qualitative and subjective information.
Different purposes of the interviews are:
• To gather information about their Present using information technology.
• Find out problems of using information technology.
• To gather facts about the procedures and decisions taking place in the
organization.
• To check the analyst understands of system operations with users of all levels.
• To validate aspects of a proposed system design.
• To build confidence in the design of a new information system.
Following are the personnel who were interviewed for the requirement analysis:
3.2 Questionnaire:
The use of questionnaire allows analysts to collect information about various aspe
of a system from a large number of persons. Close-ended questions and open-en
questions were used to find the answers about their requirements. Most of the time
Close-ended questions were used. Because Closed -ended questions are unambigu
and allows the respondent to give a definite answer. I followed the close en
question.
I categorized 4 type of questionnaire for 4 types persons such as Manager,
manager, General Employee and Customers.
A sample questionnaire is given in the appendix that has been used in Premier B
to find out answers for evaluation.
3.3 Observation:
Study and proper observation of the system is necessary. After gathering all
valuable information for system to be developed, system developer should go thro
over the existing system by observation method. the observation method
preparing critical analysis report.
As the documents represent formal information flow in the organization of the us
Information Technology, thus it helps in understanding the existing system.11
3.4 System Design:
Process Model:
Data Flow Diagram:
A graphical tool used to describe and analyze the movement of data through a syste
manual or automated. The diagram reveals the data flows into and out of the proc
rules to process data, stores of data and external entities.
9
cts
ded
ous
ded
IT
ank
the
ugh
for
ing
m-
ess,
10
DFD is prepared during the system analysis stage to portray flows and processes of
existing systems or systems in the development stages of the whole system.
Context level Diagram:
One main process which is encompassed within a single circle and more then one
entity are here. Entities are outside the scoop of the process being documented.
Neither of the entities is a source of data. Also no data stores appear in the context
diagram, since they are incorporated within the process itself.
Symbols which are used here-
Rectangle with shade implies entity here. Beginning entity is the
solidified rectangle, initiative of the whole process.
Rectangle with rounded corner is defining the process here.
This is the arrow, information flow to destination.
Parallel line, for Data store
Figure 1: DFD symbols
4.0 CRITICAL ANALYSIS
4.1 Electronic commerce
Definition: Electronic commerce or e-commerce consists of the buying, selling, marketing, and
servicing of products or services over computer networks. The information
technology industry might see it as an electronic business application aimed
commercial transactions. An alternative definition of E-commerce might view it as
the conduct of business commercial communications and management through
electronic methods, such as electronic data interchange and automated data-collection
systems. Electronic commerce may also involve the electronic transfer of information
between businesses (EDI).
According to Forrester Research (as cited in Kessler, 2003), electronic commerce
generated sales worth US $12.2 billion in 2003.
History: Historical development the meaning of the term electronic commerce has changed
over time. Originally, "electronic commerce" meant the facilitation of commercial
transactions electronically, usually using technology like Electronic Data Interchange
(EDI) to send commercial documents like purchase orders or invoices electronically.
Today it includes activities more precisely termed "Web commerce" -- the purchase
of goods and services over the World Wide Web via secure servers (note HTTPS, a
special server protocol which encrypts confidential ordering data for customer
protection) with e-shopping carts and with electronic pay services, like credit card pay
authorizations.
Electronic Payment Systems:
Electronic payment systems are becoming central to on-line business proc
innovation as companies look for ways to serve customers faster and at lower c
Emerging innovations in the payment for goods and services in electro
commerce promise to offer a wide range of new business opportunities.
Electronic payment systems and e-commerce are intricately linked given that
line consumers must pay for products and services. Clearly, payment is an Integ
part of the mercantile process and prompt payment (or account settlement
crucial. If the claims and debits of the various participants—individuals, compan
banks and nonbanks are not balanced because of payment delay or, even wo
default, then the entire business chain is disrupted. Hence an Important aspect o
commerce is prompt and secure payment, clearing, and settlement of credit or d
claims.
Types of Electronic Payment Systems
Electronic payment systems are proliferating in banking, retail, health care, on-
markets, and even government—in fact, anywhere money needs to change han
Organizations are motivated by the need to deliver products and services more c
effectively and to provide a higher quality of service to customers. This section w
briefly describe the pertinent developments in various 'industries to provide
overall picture of electronic payment systems of the past and present. Research i
electronic payment systems for consumers can be traced back to the 1940s, and
first applications—credit cards—appeared soon after. In the early 1970s,
emerging electronic payment technology was labeled electronic funds tran
12
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ies,
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ost
ill
an
nto
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the
sfer
13
(EFT). EFT is defined as “any transfer of funds initiated through an electronic
terminal, telephonic instrument, or computer or magnetic tape so as to order,
instruct, or authorize a financial institution to debit or credit an account.” EFT
utilizes computer and telecommunication components both to supply and to transfer
money or financial assets. Transfer is information-based and intangible. Thus EFT
stands in .marked contrast to conventional money and payment modes that rely on
physical delivery of cash or checks (or other "paper orders to pay) by truck, train, or
airplane. Work on EFT can be segmented into three broad categories:
1. Banking and financial payments:
• Large-scale or wholesale payments (e.g., bank-to-bank transfer)
• Small-scale or retail payments (e.g., automated teller machines and cash
dispensers)
• Home banking (e.g., bill payment) .
2. Retailing payments
• Credit cards (e.g., VISA or MasterCard)
• Private label credit/debit cards (e.g., J.C. Penney Card)
• Charge cards (e.g., American Express)
3. On-line electronic commerce payments
• Token-based payment systems Electronic cash (e.g., DigiCash) Electronic checks
(e.g. NetCheque)
. Smart cards or debit cards (e.g., Mondex Electronic Currency Card) • Credit card-
based payment systems
Encrypted credit cards (e.g.. World Wide Web form-based encryption)
Third-party authorization numbers (e.g.. First Virtual) I
14
Digital Token-Based Electronic Payment Systems
Entirely new forms of financial instruments are also being developed. One such
new financial instrument is "electronic tokens" In the form of electronic cash/money
or checks. Electronic tokens are designed as electronic analogs of various forms of
payment backed by a bank or financial institution. Simply stated, electronic tokens
are equivalent to cash that is backed by a bank. (Electronic tokens are of three
types:
1. Cash or real-time. Transactions are settled with the exchange of electronic
currency. An example of on-line currency exchange is electronic cash (E-cash).
2. Debit or prepaid. Users pay in advance for the privilege of getting information.
Examples of prepaid payment mechanisms are stored in smart cards and electronic
purses that store electronic money.
3. Credit or postpaid. The server authenticates the customers and verifies with the
bank that funds are adequate before purchase. Examples of postpaid mechanisms
are credit/debit cards and electronic checks.)
Credit Card-Based Electronic Payment Systems
To avoid the complexity associated with digital cash and electronic checks
consumers and vendors are also looking at credit card payments on the Internet as
one possible time-tested alternative. There is nothing new in the basic process. If
consumers want to purchase a product or service, they simply send their credit card
details to the service provider involved and the credit card organization will handle
this payment like any other.
Credit card payment on on-line networks can be divided into three basic categories:
15
1. Payments using plain credit card details.
The easiest method of payment is the exchange of unencrypted credit cards over a
public network such as telephone lines or the Internet The low level of security
inherent in the design of the Internet makes this method problematic (any snooper
can read a credit card number, and programs can be created to scan the Internet
traffic for credit card numbers and send the numbers to its master). Authentication
is also a significant problem, and the vendor is usually responsible to ensure that the
person using the credit card is its owner. Without encryption there is no way to do
this.
2. Payments using encrypted credit card details.
It would make sense to encrypt your credit card details before sending them out, but
even then there are certain factors to consider. One would be the cost of a credit
card 0transaction itself. Such cost would prohibit low-value payments (micro
payments) by adding costs to the transactions.
3. Payments using third-party verification:
One solution to security and verification problems is the introduction of a third
party: a company that collects and approves payments from one client to another.
After a certain period of time, one credit card transaction for the total accumulated
amount is completed.
5.0 SYSTEM STUDY:
In this section the total market approach of premier bank card division and the card
production and delivery process are described.
The Premier Bank is a 3rd generation private Bank that has been approved as a
Principal & Plus Member of VISA International.
5.1 Credit Card Policy of Premier Bank Limited:
1. Types of Visa Credit Card offered by Premier Bank:
Visa Classic Local(Valid Only in Bangladesh)
Visa Classic International(Valid worldwide except in Bangladesh)
Visa Gold Local(Valid Only in Bangladesh)
Visa Gold International(Valid worldwide except in Bangladesh
2. Credit Limit: The Credit limit should be flexible, proportionate to cardholder’s income reflects
financial soundness and employment status etc. The following card limits may be
applied to different Card types:
Card Type Credit Limit
Visa Classic-Local Tk. 10,000-Tk. 49,000
Visa Gold-Local Tk. 50,000- Tk. 50,00,000
Visa Classic- International USD 1,000-USD3,000
Visa Gold-International USD3,000-USD25,000
Following points should be given due consideration:
1. Amount and stability of the prospective cardholder’s income
2. Ownership of Home, Car, Telephone and other movable
immovable property.
3. Current financial status
4. Sound Previous credit history, especially whenever recommended
own branches or any other schedule commercial banks of Banglades
5. Age, Marital Status, dependence and nature of job
6. Credit worthiness
7. TIN
3. Credit Card Expiration Date: The Card will be issued for a Minimum period of 2 years (But Card may
suspended or cancelled at any time if the Management find that the Card is no lon
remunerative), thereafter the card will need to be renewed.
4. Criteria for approving Credit Card:
4. a. Eligibility for approval of Card:
Directors of all Commercial Banks
For Banker’s, any officer drawing monthly salary of minimum Tk. 10,00
and above.
Any borrowers who have credit limit of Tk. 5.00 Lac with any bank w
regular payments.
Customers maintaining average balance of Tk. 1.00 Lac in our bank
17
and
by
h
be
ger
0/-
ith
18
Chairman & Directors of all Government Corporations, Local Bodies, reputed
NGOs, Multinational Companies, and reputed Local organizations etc.
Assistant Director and above in Bangladesh Bank
Deputy Secretary and above in the Govt. Secretariats
All Doctors/ Physicians who have private/public practice
All Vice Chancellors, Professors and Associate Professors of Universities
(Govt.& Private).
All Lawyers who have Bar-at-Law degree and in regular practice
Corporate customers of other banks enjoying credit facility of Tk. 1 crore and
above, who are not overdue/ classified.
Employees of all reputed NGOs, Multinational Companies, Local
organizations having monthly salary of Tk. 15,000/- and above.
4. b. Following will not be eligible for Credit Cards:
Students and pupils who do not have regular job.
Borrowers who have classified loans.
Minors, Lunatics, Bankrupts, defaulters and insolvent.
5. Billing and Payment schedule:
All transactions against the card will be billed once in a month and payment must be
made within 15 days from the statement date either in full or minimum amount shown
in the statement.
6. Various International Card Holders Group:
19
International Retention Quota Card under corporate guarantee of exporting houses:
International Credit Card against yearly Personal Travel Quota:
International Credit Card against RFCD account balance:
7. Local Credit Card:
7.a. Local Card to individual:
Gold Card on individual capacity may be issued to high government officials like
Secretary, Additional Secretary, Joint Secretary, Deputy Secretary, Chairmen,
Directors, Managing Directors of Banks, Financial Institutions, Insurance Companies,
Corporations, high officials of Defense and Multinational Companies etc and other
individuals on a case to case basis.
Required Documents- Service Holders
a. Filled Application form
b. Passport size Photograph(Color) -two
c. Passport (1-7 pages) Photocopy if any
d. TIN
e. Banks Statement-latest six months
f. Salary Certificate
Required Documents- Business Personnel
a. Filled Application form
b. Passport size Photograph(Color) -two
20
c. Passport (1-7 pages) Photocopy if any
d. TIN
e. Banks Statement-latest six months
f. Income Certificate
g. Valid Trade License/ Memorandum/ Deed of Partnership
h. Proof of T&T Phone
i. Proof of Residence/ Car (If any)
7.b. Local Supplementary Card:
Supplementary cards may be issued against guarantee of basic cardholder and will be
billed to the basic cardholder accounts.
7.c. International Supplementary Card:
No Supplementary Card can be issued against International Cards.
Special features of premier Bank Visa Credit Card
1. Premier Bank ensures high level of security by placing cardholder’s photograph on
the card.
2. 5-45 days credit from the date of transaction. When customer receive their monthly
statement, they can either choose to pay in full or just the minimum due amount
shown in the statement. No interest is charged if they pay in full within payment due
date.
3. 24 hours a day, 365 days a year worldwide services.
4. No joining/ administrative fees.
21
5. The highest Premier Bank Bonus Point holder can enjoy free air ticket Dhaka
Bangkok-Dhaka (Economy Class)
6. Cash Advance Facility- See detailed in Fees & Charges
Other terms and conditions
1. If a Cardholder pays the minimum payment amount as shown on the statement
of card account within the payment due date, cardholder does not need to pay
late payment charge. If payment received late twice (two months) then the
card will be suspended.
2. Excess Over limit Charge:
For Local Cards: Tk. 500(Gold) and Tk. 300 (Classic)
For International Cards: USD 20(Gold) and USD 15 (Classic).
3. Any excess over limit must be repaid immediately otherwise further penalty
may be applied.
4. Foreign exchange markup 1% (for International Cards only).
5. Interest: 2.5% (monthly) both Local and International Cards. Interest will be
calculated on a daily basis from the date of posting of the transaction.
6. If the cardholder pays the full-billed amount within the payment due date as
shown on the monthly statement of card account, no interest will be charged,
thus the member has the option to enjoy a maximum of 45 days interest free
credit facility.
7. Cash advance interest: 2.5% (month) both Local and International Cards.
Interest will be calculated on a daily basis from the date of posting.
8. Cash advance fees: 3% or Tk. 150 whichever is higher. Fee will be debited on
card account on the posting date. In case of Cash Advance, Cardholder must
22
pay Cash Advance fee once and cash advance interest until the amount is paid
in full.
9. Interest, excess limit charge and cash advance interest (if any) will be debited
to card account on the statement date. Late payment charge (if any) will be
debited to card account on payment due date.
10. Minimum payment amount is calculated according to the following method:
a. For Local Cards: When the current outstanding is less than or equal to
credit limit, the minimum amount is 5% of the current balance shown
in the statement or Tk.500/- whichever is higher.
b. For International Cards: if the current outstanding balance is less than
or equal to the credit limit, the minimum amount is 5% of the current
balance shown in the statement or USD 50/- whichever is higher.
c. If current outstanding balance is less than USD 50/-, then the
cardholder must pay in full amount.
d. If the current outstanding balance is more than the credit limits for both
the local and international cards: the minimum amount is 5% of credit
limit, plus exceeded amount.
e. Any overdue account: for both local and international cards it is the
minimum amount of the previous statement plus 5% of the billing
amount.
The above charges are subject to change by the bank time to time at its own
discretion.
23
5.2 Credit Card Application Form Collection Procedure:
Not Approved Approved
Card Delivery to the Applicant
Final Judgment
Assessment
Received Application Form By Credit Card Division
Employees / Officers Target Branch Target
Card Application Form Collection
Rejected
Figure 2: Application collection procedure Card production and delivery Procedure: People can apply for a credit card either through branch or directly to the card
division. After receiving the application the reception section checks the require
documents and make the data entry into the register book and make a file of the
application. Then the application file passes to the credit section for credit assessment.
They analyze the application and make credit limit for the applicant. Then the file is
sent for the data capture into the computer. After capturing the applicant’s
information the file is sent to the production room for card production. Then the card
is sent to the delivery section and the file is stored in the file management section.
ApplicantReception and delivery
Board of Executive committee Credit assessment section
Operation
Card production
Information of Applicant is sent todata capture section for processing
Card is sent tothe delivery section
Application is being sent to credit section for assesment
Processed information issent for card production
Submit applicationCard is deliveredto the cardholder
Rich picture of the process of Cardproduction and delivery
24
Org
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25
26
Target Plan for all the employees of Premier Bank Limited
Each of the Officers and Executives of our Bank should provide at least 20 (Twenty)
approved credit cards in the year 2004. The employees are requested to take necessary
precautionary measures while selecting the personals who may default to pay credit
card bills.
If we can issue credit cards according to the above target hopefully we can issue more
than 8000 cards in the first year.
5.3 Marketing Approach
Being a new player in the Credit Card business they have to compete with the existing
competitors who have already expose their products in the market and they are
already marketing their products with marketing agents instead of employees of the
Bank. Initially they may start their credit card marketing with their existing employee
of the Bank. Afterwards they have to go with marketing agents like other Banks, such
as: Standard Chartered Bank, Prime Bank, Dhaka Bank, etc for marketing their
products. Marketing agents are needed to expose their product rapidly in the market
so that they can catch up the maximum market share of credit card business.
5.4 Advertisement:
1) Banner, Poster, Bill board, etc.
2) Media coverage provided through Btv, Satellite channels i.e. Ntv, Atn,
Channel I etc. as well as Daily News Papers.
3) Going for a rally from Motijheel to Ashulia by decorating some pick up or Bus
to create awareness among the people about VISA Credit Card.
4) Participation in various national events like sports, trade fairs, etc. to draw the
public attention about VISA credit card.
Invoice from PBL (Issuer) server
Punch card
Figure: Transaction processing system( CONTEXT LEVEL)
Transactionprocessing
system
1
Invoice from SCB server(acquirer)
Invalid user info of PBL
Valid user info of PBL
Unauthorized data from SCB
PBL data
PBL user info to SCB
Customer
Visa
VISA: Payment Brand
SCB: Standard Chartered Bank ( Acquirer )
PBL: PREMIER BANK LTD( Issuer)
6.0 SYSTEM ANALYSIS
27
Invoice (issuer)
Punch card
POSmachine
processing
1.0Invoice(acquirer)
Card holder
Acquire serverprocessing
2.0
Visa serverprocessing
3.0
Issuer serverprocessing
4.0
D1
D2
D3
D4
Authorized clients info of acquirer
clients not authorized byacquirer
List of authorized financial institution
Database for card holder of issuer
Figure: System level DFD of TPS
Invoicefrom
acquirer
Cardinfo
Invoicefrom
issuer
Check info
Card info
Card info
Check info
Check info
Invoice fromissuer Card info
Invoicefrom
issuer
28
Clearancesystem formerchant
1
Credit account
Show invoice
Payment
Give payment
payment
Give info
Payment info
Customer info
Figure: TPS (Clearance)
CONTEXT LEVEL
Customer
Merchant
Visa
29
Pay the Payment
1.0
SCB’s Server Processing
Merchant
Visa
1.0
PBL Server Processing
D1 Merchant info
D1 Payment info
D1 Cardholder information
D1 Account information
Update cardholder info
Store account info
Payment information
Debit accounts
Give information
Credit accounts
Store payment info
Store info
Show Invoice
Figure 5: System level DFD of Clearance System(Base II)
30
In this phase we will describe about the transaction processing system (Verificat
and clearance). Before that some definition are necessary to be given which are
follows:
Cardholder: In the electronic environment, consumers and corporate purchas
interact with merchants from personal computers over the Internet. A cardholder is
authorized holder of a payment card (e.g. Master card, Visa) that has been issued
an issuer.
Merchant: A merchant is a person or organization that has goods or services to sel
the cardholder. Typically, these goods and services are offered via a website or
electronic mail. A merchant that accept payment cards must have a relationship w
an acquirer.
Issuer: this is a financial institution, such as a bank, that provides the cardholder w
the payment card. Typically, accounts are applied for and opened by mail or
person.
Ultimately, it is the issuer that is responsible for the payment of the cardholder.
example Premier Bank in Bangladesh work as an issuer.
Acquirer: this is a financial institution that establishes an account with the merch
and processes payment card authorizations and payments. Merchants will usu
accept more than one credit card brand but do not want to deal with mult
individual issuers. The acquirer provides authorization to the merchant that a gi
card accounts is active and that the proposed purchased does not exceed the cr
31
ion
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For
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32
limit. The acquirer also provides electronic transfer of payments to the merchant’s
account. Subsequently the acquirer is reimbursed by the issuer over some sort of
payment network for electronic funds transfer. For example Standard Chartered Bank
works as an acquirer as well as issuer.
6.1 Transaction processing system through POS (Point of Sale) machine (Base 1
system):
When client punches card into the POS machine, the card information goes to the
acquirer’s server. The server checks that the card holder is authorized by them
(acquirer)
or not. If so, then the server checks the status of the card. That means the card status is
normal or not and then checks that the requested transaction can satisfied his credit
availability or not. If satisfied all the conditions then it generates an invoice with
authentication unique number and sends it back to the POS machine and thus
merchant verifies the customer.
If the card holder is not the clients of the acquirer then the card information is passed
to their payment brand’s (Visa, MasterCard etc). Then the payment brand’s server
checks that under which financial institutions the card is issued and then sends it to
the issuer’s server. The issuer’s server then checks the status of the card. That means
the card status is normal or not and then checks that the requested transaction can
satisfied his credit availability or not. If satisfied all the conditions then it generates an
33
invoice with authentication unique number and sends it back to the POS machine and
thus merchant verifies the customer.
6.2 Example of Transaction processing system (Verification: Base I):
When a PBL customer punches card to the POS machine, the card information first
goes to the Standard Chartered Bank’s server as acquirer. Then SCB server found that
the card holder is not authorized by them. As they are under the payment brand of
Visa, they send it to the Visa server which is located in Singapore for the south Asian
region. Then Visa checks under which member (financial institution) the card holder
exist. They found PBL as the issuer. Then they send it to the PBL’s server. The PBL’s
server then checks the status of the card. That means the card status is normal or not
and then checks that the requested transaction can satisfied his credit availability or
not. If satisfied all the conditions then it generates an invoice with authentication
unique number and sends it back to the POS machine. The cardholder then signs on it
and thus merchant fulfill the client’s request or order.
The whole process described above is the 1st part of the transaction processing system
which is called Base 1 system.
6.3 Clearance part of the Transaction processing System (Base ll):
In the 2nd part of the system the payment are settled between merchant and the
acquirer as well as the issuer. The description is as follows:
34
After getting the invoice signed by the cardholder the merchant goes to the acquirer
(ex. Standard chartered bank) and shows the invoice. Then the acquirer pays the
payment to the merchant. The acquirer then sends the information to the visa. Visa
then debit the amount from issuer. The issuer collects the information from visa
through Internet.
7. CONCLUSION:
In the competitive world of business, E commerce becomes essential for the nature of
global business. Now a day people can get there daily needs by sitting there own
home. for example in USA 16 percent cars are sold through Internet. Here credit card
comes in to the picture. People can reserve air ticket, hotel booking, can pay the
various utility bill by using credit cards. This makes life quite comfortable. The main
complaint heard about Credit card is that while they are convenient, they are
expensive to use. However, if we look at it from a banking perspective, business is
business. Regardless of what we think of Credit Cards, there is no doubt that they
have changed the world and the way in which we do things. For example, think how
many times we have been out somewhere only to discover we have no cash and we
are out of checks, ah, but in the corner, there is a Credit Card. In the blink of an eye,
we swipe the card and now have cash on hand. In addition to pulling money out, the
Credit Card also makes it convenient to deposit money, transfer money, and check
balances. Best of all, to use a Credit Card, we do not have to go to the bank. We will
find Credit Cards at other banks, grocery stores, shopping malls, along the roadside,
Buckingham Palace, airports, in casinos, and even on the South Rim of the Grand
Canyon. For this reason, Credit Cards are extremely helpful!
In our country the number of credit card holder increasing at an outstanding rate.
Most of them are found as young generation. It was a nice experience for me to work
on credit card division in Premier Bank Ltd. And this internship project gives
experience of working with other peoples, opportunity of learning human skills,
communicate with people and learn me how to service in a company like The Premier
Bank. I also like to mention that without basics of our university computer courses, it
would be difficult on my part to complete and understand this project. The interns
experience cannot eliminate the fact that the textbooks, different datab
management system projects helped me a great extent regarding the basic concepts
fact, they helped me to acquire the relevant knowledge. I merely want to state
along with studying from the books, it is extremely important to understand the
life situational problems from discussions with concern professionals
observations of other projects developed by more experienced Software Developer
Lastly I would like to mention that within the short period of time and with ot
constraints I managed to gather as much information as possible for the analysis of
system. However, to make more efficient project much more attention and tim
required to pay.
37
hip
ase
. In
that
real
and
s.
her
the
e is
38
REFERENCES
1. O’Brien, James A. 2000 Introduction to Information Systems: Essentials for
the Internetworked E-Business Enterprise, McGraw-Hill.
2. Kendall, Kenneth E., Kendall, Julie E. 2003 Systems Analysis and Design,
Prentice-Hall India.
3. Pressman, R.S. 2001 Software Engineering: A Practionar’s Approach,
McGraw-Hill.
4. Whitten, Jeffrey L., Bentley, Lonnie D., Dittman, Kevin C. 2001 Systems
Analysis and Design Methods, McGraw-Hill.
5. Secure electronic transaction, page 550, “Cryptography and network security”
2nd edition 2003 by William Stallings.
6. Systems Analysis And Systems Design, page 92, “Systems analysis and design”
2nd edition 1998 by Elias M Awad.
7. ATM, page 525, “Data communication and networking” 2000 edition, by
Behrouz A Forouzan.
Web pages:
www.premierbankltd.com
www.visa.com
