MasterCard’s Global Clearing Management System
MasterCard clears credit card transactions through the Global Clearing Management System (GCMS). Clearing is a process through which a card issuing bank exchanges transaction information with a processing bank and occurs simultaneously with the settlement, which is the actual exchange of funds between a processor and an issuer.
The GCMS replaced the INET system a decade ago and uses messages in the Integrated Product Messages (IPM) format. This format is an International Organization of Standardization (ISO)-based flexible format, consisting of bitmapped messages that don’t require fixed-fields where data are placed. This post will review what these messages are composed of and help you read them.
IPM message structure. All IPM messages contain four main components:
- Message Type Identifier (MTI). MTI is the first element of every IPM message.
The MTI is always located in positions 1-4 of the message. The MTI describes the message class. For example, MTI 1442 indicates a chargeback message. - Bitmaps. Bitmaps are the second and third elements of every IPM message. The bitmaps indicate the presence or absence of ISO data elements (DE 1 through DE 128) in each message. There are two bitmaps in every message:
- Primary – Positions 5-12; indicates the presence of data elements 1-64.
- Secondary – Positions 13-20; indicates the presence of data elements 65-128. Each bit contains a value of zero if the corresponding data element is not present in the message or a value of one if it is present.
- Data elements. Data elements represent different, pre-identified pieces of information and follow the bitmaps in order by number (known as data element number). For example, function codes are stored in DE 24 (Function Code) and indicate the specific purpose of a message in a message class. Examples of function codes are 450 (first chargeback – full amount) and 453 (first chargeback – partial amount).
- Message reason codes. Message reason codes for first chargebacks, second presentments, and arbitration chargebacks are stored in DE 25 (Message Reason Code).
For example, a first chargeback for a full amount for message reason code 4837 – No Cardholder Authorization would have the following values.
| MTI | 1442 | Indicates that the message is a chargeback. |
| DE 24 (Function Code) | 450 | Indicates that the message is a first chargeback for the full amount. |
| DE 25 (Message Reason Code) | 4837 | Indicates the reason for the chargeback. |
Chargeback processing cycles. The following table summarizes the IPM messages used in each chargeback processing cycle.
| MTI | Description | Function Code | Description | Initiated by |
| 1240 | First Presentment | 200 | First presentment | Acquirer |
| 1442 | First Chargeback | 450 | Full amount | Issuer |
| 453 | Partial amount | Issuer | ||
| 1240 | Second Presentment | 205 | Full amount | Acquirer |
| 282 | Partial amount | Acquirer | ||
| 1442 | Arbitration Chargeback | 451 | Full amount | Issuer |
| 454 | Partial amount | Issuer |
The following MTI and Function Code combinations may also be used in chargeback processing:
- Retrieval Request / 1644-603.
- Fee Collection (Member bank-generated) / 1740-700, -780, -781, or -782.
- Fee Collection (Clearing System-generated) / 1740-783
Additionally, IPM Second Presentment / 1240 and Arbitration Chargeback / 1442 messages indicate the reason for the second presentment or arbitration chargeback.
Learn how to lower your card acceptance cost
Learn how to accept credit and debit cards at the lowest processing costs. The Payment Card Acceptance kit contains a video and an e-book:
- Video – Card Acceptance Best Practices for Lowest Processing Costs (18 min).
- E-Book – Payment Card Acceptance Guide (19 pages).
