VISA CARD POS TRAINING

It is known that our bank enters an agreement with Dashen Bank to render Card (VISA, Master and Dashen local visa card) POS (Point of Sale) service. In line with this every branch need to deploy the service as per the agreement. Since FAD is finalized the relevant accounts, you are expected to carry out with due care. Regarding this all branches must be aware of the following aspects: 1. Roles: There will be two kinds of roles A. Supervisor: it has the power to grant access to cashiers and follow-ups the proper implementation of the service. In one branch there can be more than one supervisor. It will be the Branch managers duty to decide how many supervisors are needed for the branch. B. Cashier: they have an access to process the transaction and to carry out the service. In one branch there can be more than one cashier. It will be the Branch managers duty to decide how many cashiers are needed for the branch.

2. Granting Access: It is the branch managers duty to select and to request who will be entitled to get the access. A. For supervisor: only the representatives from Dashen Bank are authorized to grant access. The supervisory delegation form must be filled and signed respective branch managers. B. For Cashiers: The Branch manager or his designated supervisor is authorized to grant access. Supervisor also can have a cashier access, to effect transaction and to play dual roles. This is for the purpose of granting the service by any available staffs.

3. Report and Claim: The branch manager or his designated supervisor is responsible to sent report for the respective organ/department and to follow up the settlement of the claim monthly bases.

4.Commissions: The cashier must clearly explain for the customers the type, rate and amount of commission needed to be collected for our bank as well Dashen bank. Regarding commission it will be collected from two services. A. Local Card (Dashen Visa Card) Payment: The card is Dashen Bank visa card. Here the Dashen bank system will collects 0.5% automatically at the time of the transaction from the account. In addition to that during payment we need to collect 1.5% commission based on the amount out of it 0.5% is our bank portion and 1% is the Dashen bank portion. B. Foreign (VISA of Master) Card Payment: Here at the time of payment we have to collect 3% of the amount which is payable for Dashen bank. 5. To ensure the availability of receipt and other necessary stationary materials

 1. I. A.

Accounting Entry Account Type Asset Account Deposit With other Domestic BanksGeneral Ledger Category Dashen Bank-Main Area Bank..Subsidiary ledger category General ledger code.00107 Subsidiary Ledger Code.00107330

Purpose: serve to transact payment/receipts made on behalf of Dashen Bank Debited- when DB paid any obligation to BIB Credited- when BIB paid to DB The account maintained and transacted only at HO level (FAD)

Effect Foreign (UE-Foreign) General Ledger Category UE-Dashen Bank-Foreign (Card Banking Service)..Subsidiary ledger category General ledger code.00118 Subsidiary Ledger Code.00118070 Purpose: serve to maintain the FCY equivalent ETB claim amount at each transaction made on behalf of DB Debited- when cash paid to DB customer on foreign card holder against cash LCY and commission account Credited- when BIB IBD respond the claims tickets (this claims must be prepared and send by branches to IBD once in a week/month with supporting attachments ) As per the agreement, 50% of the cash advance payment foreign card DB will refund in FCY (balance less transfer charges) by crediting our corresponding account and the remaining 50% will be refunded in LCY by crediting our current account maintained with DB Main area Branch. FAD after receiving the claim will respond IBDs claims by debiting Deposit account with DB
B. Unclear

C. Unclear Effect Local(UE-Local) General Ledger Category UE-Dashen Bank-Local (Card Banking Service)..Subsidiary ledger category General ledger code.00119 Subsidiary Ledger Code.00119140 Purpose: serve to maintain the LCY claim amount at each transaction made on behalf of DB Debited- when cash paid to DB customer on local card holder against cash LCY and commission account Credited- when BIB FAD respond the claims tickets (this claims must be prepared and send by branches to FAD once in a week/month with supporting attachments )

II. Expense Account A. General Expense General Ledger Category Dashen Card Banking ServiceCharges..Subsidiary ledger category General ledger code.00501 Subsidiary Ledger Code.00501075 Purpose: This account used to record the charges of the DB up on transferring 50% of the foreign card payments to our correspondent bank account The account maintained and used by IBD only

B. General Expense General Ledger Category Dashen Bank POS Rent Expense..Subsidiary ledger category General ledger code.00501 Subsidiary Ledger Code.00501385 Purpose: serve to record monthly payments of POS terminal rent to DB. C. General Expense General Ledger Category Dashen Bank Card Support Fee..Subsidiary ledger category General ledger code.00501 Subsidiary Ledger Code.00501386 Purpose: This account will be used to record the monthly fixed support fee for continuous support. (Software and upgrade, hardware, and related administrative issues) The expense shall be covered by HO

III. Income Account A. Commissions General Ledger Category Commission on Dashen Card Banking Service-Foreign..Subsidiary ledger category General ledger code.00401 Subsidiary Ledger Code.00401350 Purpose: This account will be used to record commissions earned on payments of Foreign card, (if any) at each transaction made on behalf of DB B. Commissions General Ledger Category Commission on Dashen Card-Local..Subsidiary ledger category General ledger code.00401 Subsidiary Ledger Code.00401360 Purpose: This account will be used to record commissions earned on payments of DB local card at each transaction made on behalf of DB

2. Accounting Entry I. Foreign Card Payment-Branches which are provided with POS terminal shall perform different activities up on presentation of VISA and Master Card by customers for cash advance payment A. Amount of Withdrawal: There is a limit in amount of withdrawal but since there are different limit as per the different foreign banks we cant specify it. System in this case restricts the amount as per each bank rules. B. Currency Type: Even though various customers requests in his own country currency, we have to assist the customer to convert into equivalent to USD or to FCY which our bank maintains equivalent ETB rate in order to convert it into Birr.

C. Transaction Handling: Suppose a foreign VISA or MASTERCARD cardholders appears at one of BIBs branch (Z) for cash advance payment for Birr 1,000.Here note the following points Ascertain/ask for the type of card the customer possess (Local or Foreign) Check carefully the security features provided in the POS operation guide Make sure that the card is not lost or stolen or damaged and check its security features Inform the customer that he will get a net cash payment after deducting the relevant commissions (3% will be deducted) If the cardholder wants a net proceed, the total amount to be deducted is plus the commission amount If the cardholder agrees, If the cardholder agrees, he/she must present legal identity card and proper identification should be done. Fill the Encashment Voucher which is designed for this purpose

The amount to be filled on the encashment voucher is Gross amount----1,000.00 Service ch. (BIB)--- 00.00 Service ch.(3%DB)30.00 Net Procced---970.00 Make the card holder sign on the encashment voucher Dip-in (Insert) or swipe the card on the POS machine and collect receipt printout for this specific transaction and make sure the amount is clearly recorded on the receipt paper for equivalent gross amount of Birr 1,000 and make the customer sign on the receipt Make the cardholder sign on the customer copy of the voucher and attach all documents with the voucher and pay the net amount of Birr 970.00 to the cardholder

D. Journal Entries to be posted: Debit. UE-Dashen Bank-Foreign (Card Banking Service)1,000.00 Credit- Cash Local Currency --------------------------------------970.00 Payable A/c (3% charge) ---------------------------------30.00 E. Claim Settlement Handling: On weekly/monthly bases a list of such payments shall be generated and a claim ticket with supporting attachments (schedules) should be prepared and sent to BIB IBD Up on sending the claim, a tracer has to be maintained retaining one set of the claim ticket for reference and making follow up of the settlement

IBD after ascertaining the credit of BIBs Nostro account for 50% of the claim in FCY and 50% of the claim in LCY for local account maintained with DB, responds the claim through FAD IBD will sends list of such settlement along with an authorization to debit its branch account maintained with FAD and responds the respective branches claim through FAD Up on receipt of the responded claim along with authorization to debit IBDs account, FAD forward to the branch (Z)

HO FAD then forwards the responded claim to Z branch along with an authorization to debit HO account and credit it receivable Up on receipt of the responded claim along with authorization to debit HO account maintained at Z branch, Z branch passes the following entry and settles its claim tracer
Debit- HO account------------------1,000.00 Credit-UE-Dashen Bank-Foreign (Card Banking Service)---1,000

B. Local Card Payment- Branches which are provided with POS terminal shall perform different activities up on presentation of VISA Dashen Local card by customers for cash advance payment A. Amount of Withdrawal: There is a limit in amount of withdrawal equal to 8,000.00 ETB per day. Any amount withdrawn using the POS or ATM from any terminal will be considered in setting the withdrawal limit in that particular day. C. Currency Type: only ETB is allowed in the transaction since it is a local card. D. Transaction Handling: Suppose a VISA Dashen local cardholders appears at one of BIBs branch (Z) for cash advance payment for Birr 1,000.Here note the following points Ascertain/ask for the type of card the customer possess (Local or Foreign) Check carefully the security features provided in the POS operation guide. Make sure that the card is not lost or stolen or damaged and check its security features

Inform the customer that he will get a net cash payment after deducting the relevant commissions (0.5% BIB+1.5%DB will be deducted. Out DB 1.5% charge 0.5% will be deducted by the system automatically) If the cardholder wants a net proceed, the total amount to be deducted is plus the commission amount If the cardholder agrees, he/she must present legal identity card and proper identification should be done. Fill the Encashment Voucher which is designed for this purpose The amount to be filled on the encashment voucher is Gross amount-----1,000.00 Service ch. (0.5%BIB)- 5.00 Service ch.(1.5%DB)--15.00 Net Procced---- 980.00

Make the card holder sign on the encashment voucher Dip-in (Insert) or swipe the card on the POS machine and collect receipt printout for this specific transaction and make sure the amount is clearly recorded on the receipt paper for equivalent gross amount of Birr 1,000 and make the customer sign on the receipt Make the cardholder sign on the customer copy of the voucher and attach all documents with the voucher and pay the net amount of Birr 985.00 to the cardholder

D.Journal Entries to be posted: Debit- UE-Dashen Bank-Local C Card Banking Service) 995.00 Credit- Cash Local Currency ---------------------------------------980.00 Commission on Dashen Card-Local (0.5%) -------------5.00 Payable A/c Local (1% charge) --------------------------10.00 Claim Settlement Handling: On weekly/monthly bases a list of such payments shall be generated and a claim ticket with supporting attachments (schedules) should be prepared and sent to FAD Up on sending the claim, a tracer has to be maintained retaining one set of the claim ticket for reference and making follow up of the settlement

FAD after ascertaining the credit of BIBs account with DB for claimed amount, responds the claim through passing the following entries Debit- Dashen Bank-Main Area Bank -----995.00 Credit- Z branch account ------------------------------------------995.00 Up on receipt of the responded claim along with authorization to debit HO account maintained at Z branch, Z branch passes the following entry and settles its claim tracer Debit- HO account----------------------995.00 Credit-UE-Dashen Bank-Local (Card Banking Service)995.00

Summary
Account Type 1. Asset Dashen Bank-Main Area Bank UE-Dashen Bank-Foreign (Card Banking Service) UE-Dashen Bank-Local (Card Banking Service) 2. Expense Dashen Card Banking Service-Charges Dashen Bank POS Rent Expense Dashen Bank Card Support Fee 3. Commision Commission on Dashen Card Banking Service-Foreign Commission on Dashen Card-Local 4. DB commission settlement account