Stand-in authorization flow diagram

In the standard authorization flow, the transaction is initiated by the acquirer (the POS bank) and forwarded to the issuer (the card-issuing institution). The authorization process is completed once the issuer returns a response to the transaction.

However, this is not always possible. When the issuer fails to respond to the transaction, BKM (the Interbank Card Center) can grant authorization on the issuer's behalf. Authorization transactions granted in place of the issuer are called Stand-In Authorization. In some places this is also referred to as STIP (Stand-In Provision).

Not-on-us Transaction - The Stand-In Authorization flow in place of the Issuer (the card's own bank) works as follows.
  1. When a transaction is attempted with a card belonging to a different bank via a POS or ATM, the transaction is first forwarded by the POS/ATM to the bank that owns the POS/ATM (the acquirer).
  2.  The acquirer bank checks the information of the bank the card belongs to, determines the destination, and forwards the transaction accordingly. (The destination can be any of BKM, Visa, MasterCard, Amex, or Diners Club. Let's assume the card belongs to a domestic bank, so the destination is BKM.)
  3. If BKM cannot forward the transaction to the card-issuing bank (issuer) for any reason (no communication with the bank, a malfunction in the bank's system, etc.), or if the card-issuing bank (issuer) fails to respond to the transaction within the 15-second timeout period, the BKM stand-in authorization module takes over.
  4. BKM applies various checks and approves or declines the transaction within the limits specified by the card-issuing bank (issuer). The checks performed by BKM:
  • Cardholder Billing Currency <> 949
  • BIN-based Check Digit Control
  • Prohibited Card Control
  • Issuer-based Risky Merchant Control
  • Issuer-based Risky MCC Control, etc.

   5.  BKM forwards the transaction result to the acquirer bank.

   6. The transaction is completed in accordance with the content of the information forwarded.

Note: For debit card transactions performed at an ATM, if stand-in authorization would otherwise apply, the transaction is unconditionally declined without any checks being performed.