STIP Guide Part 2 header image

Welcome to part 2 of the STIP Mega Guide.

In this part, and in the upcoming part 3, I cover services that help manage the balance between risk and customer service. Striking this balance is essential when operations occur within STIP and are not under the issuer's full control.

For part 2, we focus on services that control cardholder spending limits.

Background

Transaction approvals and declines are at the heart of card payment processing, both on issuer host systems and within VisaNet STIP. Although many checks inform an authorization decision, the most common, and the one that often decides whether a transaction is approved or declined, is the check on whether the cardholder has enough money to pay for the transaction.

Spending controls are therefore central to STIP processing. The main tools are outlined below.

VIP STIP

Issuer Available ❌ Issuer Unavailable ✅

VIP STIP refers to the traditional or legacy STIP used for many years within VisaNet. With the introduction of Smarter STIP, VIP STIP is generally limited to non–Smarter STIP endpoints or rare fallbacks when the Smarter STIP engine is unavailable.

VIP STIP lets clients allocate spending limits for authorizations processed in STIP situations. Options include:

  • Set maximum count and maximum cumulative amount (USD) for purchase and/or cash
  • Set maximum amount per single purchase or cash transaction
  • Allow unlimited transactions for purchase and/or cash
  • Disallow any authorizations in STIP

Points to note

  • Allowing unlimited approvals in STIP should be approached with caution due to risk. All other edits and checks still apply.
  • VIP STIP limits are applied after other edits. If a transaction fails an earlier edit, activity limit checks are not used, even if unlimited approvals are configured.
  • To monitor transactions that fail activity limit checks, issuers should review STIP advices with response code 61 (Exceeds approval amount limit) and response code 65 (Exceeds withdrawal frequency limit).

Smarter STIP

Issuer Available ❌ Issuer Unavailable ✅

Background

Smarter STIP uses artificial intelligence and deep learning to emulate issuer host decisions during STIP. It analyzes transactions for participating programs, including issuer decisions and STIP responses, to infer the issuer's strategy down to the individual card level.

Smarter STIP processing overview

When BINs are enrolled in Smarter STIP, there is a 21-day observation period after the VisaNet change is loaded. During this time the model learns client behavior before fully authorizing transactions.

Smarter STIP is not a "silver bullet" solution to STIP approval rates. Results since its introduction to VisaNet show encouraging improvements in approval rates, but multiple checks must pass before the model can render a decision. Examples:

  • Services not applicable to Smarter STIP: balance inquiries, account verification, original credit or account funding transactions, and merchandise returns
  • PIN transactions where the BIN does not use Visa's PIN Verification Service (PVS): if a PIN is present, it must be verified; at minimum, the PVS Stand-in option must be enabled for STIP to check the PIN
  • Authentication or verification failures: CVV, CAVV, CAM, CVV2, and PIN must pass before the Smarter STIP model is invoked
  • Issuer-instructed declines: blocks set via ASAF, Visa Stop Payment Service, Visa Risk Manager, and similar controls will prevent the transaction from reaching Smarter STIP
  • Legacy VisaNet parameters: if not adjusted during Smarter STIP enrollment, they may still block transactions (see part 2 under "Client options for tailoring Smarter STIP processing")

If any of the above checks fail, the transaction is declined immediately and does not proceed to a Smarter STIP model decision.

Client options for tailoring Smarter STIP processing

Client choices can be grouped in two parts.

Part 1: Main spending controls

Client questions used to set preferred limits:

  • Maximum individual POS transaction amount eligible for Smarter STIP (USD)
  • Maximum individual ATM transaction amount eligible for Smarter STIP (USD)
  • Maximum cumulative daily POS amount for the issuer eligible for Smarter STIP (USD)
  • Maximum cumulative daily ATM amount for the issuer eligible for Smarter STIP (USD)
  • Total maximum cumulative daily amount across POS and ATM for the issuer eligible for Smarter STIP (USD)

The first two questions set individual transaction limits for POS and ATM. The next three set cumulative limits across all approved transactions for the issuer, with the final question combining POS and ATM.

Important point: legacy VIP STIP activity limits are card level, while Smarter STIP limits are issuer level across all cards on the BIN. If any configured limit is exceeded, Smarter STIP will decline.

Part 2: Options to remove prior VisaNet blocks

Many legacy options exist in VisaNet to handle specific scenarios. If enrolled BINs are already configured with such blocks, clients can allow Smarter STIP to override them, since Smarter STIP provides more current decisioning. Options include:

  • Ignore expiration date checks during Smarter STIP (Y/N)
  • Ignore POS card-not-present decline option during Smarter STIP (Y/N)
  • Ignore "decline key entered" controls during Smarter STIP (Y/N)
  • Ignore "decline POS PIN not present" controls during Smarter STIP (Y/N)

Final points to note

  • Smarter STIP falls back to VIP STIP only if the Smarter STIP engine encounters an issue. If a transaction fails Smarter STIP in normal operation, VIP STIP is not referenced.
  • All Smarter STIP declines use response code 05 (Do Not Honor).
  • To confirm whether Smarter STIP handled a transaction, look for value C in field 44.4 (Extended STIP Reason Code) in the associated STIP advice messages.

Join me for part 3 where we will look at the services more dedicated to the risk prevention side of STIP, plus a look at some of the examples of STIP C instant decline scenarios.