1.6 Holding of Client Funds

An issuer needs to be authorised by the banking regulator in their country to hold customer funds; see Regulation of Card Network Participants. Issuers must hold their cardholder’s funds within separate, ring-fenced accounts (so that if the issuer’s business fails, the cardholder’s funds are protected).

The schemes also require that issuers hold a certain amount of funds in a cash reserve fund, to cover any future risks of payment default.

If you are using the services of an issuer/BINClosed The Bank Identification Number (BIN) is the first four or six numbers on a payment card, which identifies the institution that issues the card. sponsor, your issuer will be responsible for holding client funds on your behalf.

1.6.1 Financial Settlement and Reconciliation

Issuers receive daily settlement files, containing details of all financial transactions (i.e., payment transactions which have cleared and are ready to be paid). The issuer must transfer or make funds available to the card scheme for disbursement to the acquirers (and vice versa if required). This is done on a day-end netting basis, based on the total balance owed for that day.

The issuer must reconcile the cleared amounts for each transaction to the total balance amounts on each card. They also must match balances against card fees, scheme interchange and processing charges.

Thredd does not hold client money. For any queries relating to client money and reconciliation, please speak to your issuer.