Some terms are indispensable in the payment systems glossary. One of them is the term Not Onus. Not Onus literally means “Not On Us.” In payment systems, it refers to a situation where the card-issuing bank and the POS/ATM (acquiring) bank are not the same.
When a transaction is Not Onus, its reconciliation is carried out through clearing. In this case, the POS/ATM bank (acquirer) must pay a commission to the card-issuing bank (issuer). The issuer is the party that receives the clearing commission. Seen from this angle, the issuer side may appear highly profitable in Not Onus transactions, but the issuer also bears the risk of covering the customer's debt for a period of 10-40 days, or the risk that the customer may not pay the debt at all.
In short, although Not Onus transactions are not a situation particularly desired by acquiring banks (POS/ATM banks) in terms of profitability, they are an indispensable part of payment systems when considered in terms of the income generated, even if low, and customer satisfaction.
Commission structure and business impact
In a Not Onus transaction, since the bank that acquires the transaction (acquirer) and the bank that issued the card (issuer) are different, a clearing commission arises between them. This commission is revenue for the cardholder's bank (issuer).
The acquirer covers this cost with the commission it receives from the merchant. For this reason, merchant commission rates can vary depending on the card type and on whether the transaction is onus or not.
Bank product managers aim to grow their own POS network in order to increase their onus ratio.