Credit Card Processing in

SAP
Robert Pulaski – Sr. Manager/Architect
Learning Points

• Why automate credit card processing?

• A basic understanding of credit card processing
• An overview of the process and related accounting for
credit card processing in SAP
• Highlight some important configuration in the IMG
• Discuss implementation options and issues
• Highlight some best practices
Why automate credit cards in SAP?
Answer - Improved ROI
• Improve cash flow by reducing outstanding receivables
from 30 – 90 days to 1 to 3 days
• Reduce bad debt
• Possibly reduce paper invoicing costs
• Increase transaction efficiency
Terminology

• Merchant ID – unique id identifying the supplier(you)

• Processor (Clearing House) – provides authorization and
settlement services
• Merchant Bank – supplier’s bank(your bank)
• 3rd Party Provider – provides the interfacing solution to
allow SAP to communicate with the processor
 Process Flow for Credit Card
Processing

Supplier requests Processor provides

Buyer gives credit authorization and Banks issue and
card info authorization and receive funds
at a later time batch settlement services
settlement
Process Overview in SAP

• Save valid sales order

• Authorization request sent (real-time)
• Authorization response - accept/decline (real-time)
• Ship
• Bill
• Settlement (batch)
Save Valid Sales Order – VA01
Authorization Response – VA01
Authorization Response – VA01
Document Flow – VA01
Billing – Accounting Document – VF01
Accounts Receivable Customer –
FBL5N
GL Account Open Item – FBL3N
Settlement – FCC1
Settlement – FCC1
Settlement – FBL3N
IMG Configuration
IMG Configuration –
Setting Up Card Types
IMG Configuration –
Setting Up Merchant ID
IMG Configuration –
Assign Merchant ID
IMG Configuration –
Account Determination
IMG Configuration – Assign Clearing Account
Implementation Options

• Build a custom program(s) to interface with the

processor(s)
• Purchase a 3rd party solution from vendors such as
Cybersource or Paymetric
• Manual (as a backup?)
Pros/Cons Custom Programs

• Pros
• Lower initial external cost
• Possibly lower transaction costs
• If it already works – don’t fix it?

• Cons
• Custom development costs
• Possible custom configuration in SAP
• Maintenance of custom code
Pros/Cons 3rd Party Solution

• Pros
• No/little custom development costs
• Less custom configuration in SAP
• Maintenance/support of 3rd party vendor
• Quicker to implement?
• Can offer additional functionality beyond SAP delivered

• Cons
• Initial external cost
• Possibly higher transaction costs
• Maintenance/support of 3rd party vendor
Implementation Issues

• 3rd Party Installation

• Servers
• Access keys
• RFC calls
• Etc..
• Make sure you have good Basis and IT people if you attempt
installation yourself. Otherwise best to have the 3rd party provider
handle the installation.
Implementation Issues

• Authorization horizon/validity
• Authorization window – number of days within a shipping
confirmation window before a valid authorization can be issued
• Authorization validity period – number of days an authorization is
valid before a new authorization is required
• Typically 28-30 days
• Back orders can be a royal pain!
Implementation Issues

• Additional charges
• Exact total for additional charges such as freight not known
• Solution – user exit
Implementation Issues

• Split shipments
• Partial or multiple shipments can require several authorizations
• Solution – user-exit
Implementation Issues

• Multiple cards on one order

• Different credit limits
• Different credit card owners
• CRM – different capabilities (though similar process)
Implementation Issues

• Foreign Currency
• Make sure the clearing house you use can handle all currencies
required
Best Practices

• Encrypt credit card data via either 3rd party or SAP (4.6c)
• Can require OSS notes
• Limit access to credit card information via security
• Only those who need access
• Additional fraud checks
• Address check
• CID – Card Identification Number
• Can require OSS notes or user-exits
Additional Transactions

• FCC2 – Repeat Settlement

• FCC4 – Display Logs
• FCC3 – Delete Logs
• FBRC – Reset Cleared Items
• FCCR - Standard Reports
• VKM1 – Credit Hold Report
• VCC1 – Payment Card Credit Hold Report (New)
Different Flavors of SAP

• CRM
• SAP Retail and POS
• Etc…
Summary

• Automated credit card processing can be efficient and

enhance ROI
• In most cases buying a 3rd party solution is going to be the
best option compared to building a series of in-house
custom programs
• There will be lots of issues that need to be thought out
carefully
• Take credit card fraud seriously
Q&A

Robert Pulaski
Senior Manager - Architect
Hitachi Consulting
www.hitachiconsulting.com
Direct: 804.291.6009
rpulaski@hitachiconsulting.com
Inspiring your next success! ®
Session Code:
1103 / Credit Card Processing in SAP