Within the STIP framework, specific rules (STIP rules) are established to meticulously assess whether a transaction qualifies for STIP.

These rules are fundamental to maintaining the integrity and security of the transaction processing system, especially under circumstances where direct authorization from the Issuer is unattainable.

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It is crucial for you to understand the differing limits applied under normal and STIP conditions to anticipate transaction outcomes accurately, while managing the risk of losses.
This knowledge ensures preparedness and reduces potential disruptions in transaction processing during STIP scenarios.

Determining transaction eligibility

STIP rules act as gatekeepers, evaluating transactions against a set of predefined criteria to determine their eligibility for STIP.

When a STIP rule is activated, it signifies that the transaction meets the necessary conditions and is eligible for STIP. Consequently, Banking.Live, acting on the client’s behalf, will process these qualified transactions in STIP mode.

This ensures that the flow of transactions remains uninterrupted, even in scenarios where direct Issuer interaction is compromised.

Customization of transaction parameters

In addition to determining eligibility, STIP rules also play a critical role in defining the operational parameters for STIP transactions.

These parameters typically include velocity (the frequency of transactions), frequency limits, transaction amount limits, transaction/spend type, etc.

The criteria set for STIP transactions often differ from those applied to regular transactions, reflecting the heightened risk profile associated with processing transactions in a stand-in capacity.

Risk mitigation in STIP processing

By customizing the spend type (transaction type) velocity, frequency, and amount limits for STIP transactions, these rules help mitigate potential risks.

This differentiation in parameters is crucial, as it addresses the unique challenges posed by STIP processing - primarily, the lack of real-time Issuer authorization.

The stringent application of these customized rules ensures that while transaction continuity is maintained, it does not come at the expense of security or control.

How STIP is triggered by STIP rules

In the context of STIP, the eligibility of a transaction is determined through a systematic evaluation by the Banking.Live Rules Engine. This chapter delineates the criteria and logic applied within this evaluation framework.

Criteria for STIP eligibility

Rule activation: a transaction is deemed Eligible for STIP if it activates or triggers a predefined STIP rule within the rules engine.
The activation of a STIP rule is indicative of the transaction meeting all the necessary conditions outlined for STIP.
Absence of rule activation: conversely, if the transaction does not trigger any STIP rule within the Rules Engine, it is classified as Not Eligible for STIP.
This denotes that the transaction does not satisfy the requisite criteria for STIP and will thus be processed through normal channels, subject to standard authorization protocols.

STIP rules example

Here we use an example scenario to describe the application of transaction limits under normal and STIP conditions for the Platinum Card Group:

Normal transaction limit: Under standard operational conditions, the Platinum Card Group is assigned a per-transaction limit of $5,000 USD. This limit allows cardholders to make individual purchases up to this amount, ensuring flexibility and high spending capability. For example, a transaction amounting to $4,000 USD would be approved, as it falls within the normal transaction limit.
STIP transaction limit: In scenarios where the client's system is down and STIP has been activated, a different transaction limit applies to the Platinum Card Group. During STIP mode, the per-transaction limit is reduced to $1,000 USD. This reduced limit aims to minimize risk exposure while the primary processing system is unavailable.

Scenario analysis

Normal scenario: a cardholder attempts to spend $4,000 USD. Since this transaction falls under the normal limit of $5,000 USD, it is approved without any complications.
STIP scenario: should the same cardholder attempt a transaction of $4,000 USD during a period when STIP is activated, the situation changes.
Although this amount is under the usual $5,000 USD limit, it exceeds the STIP-specific limit of $1,000 USD. In this case, the STIP rule for the transaction limit is not triggered because the transaction exceeds the reduced STIP limit. As a result, the transaction would not be marked as Eligible for STIP and consequently, would be declined.

STIP rules configuration

Banking.Live's Rules Engine caters to STIP type rules at a group or product level.

This allows products that are enabled for STIP to have different groups that cater to different STIP rules e.g. a low risk group or VIP group may have a limit of $5,000 USD, whereas a high risk group may be limited to $100 USD in a STIP event.

How is a STIP rule configured?

STIP rules are configured by Paymentology based off your requirements outlined in your products PSF.

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You can read more on the PSF here.