# Processor-only Issuing

Manage your Issuing programme, including regulatory requirements, compliance, and licensing.

When you choose the [process-only management model](https://docs.stripe.com/issuing/program-management.md#processor-only), Stripe Issuing (also known as the *Issuer Processor*) integrates with the card network, card manufacturer, and the *Bank Identification Number (BIN) sponsor* (A BIN sponsor is a regulated financial institution that lets another business access its payment environment using the sponsor's Bank Identification Number (BIN)) through you. The card network configures BINs on their system with Stripe as the processor. Additionally, proprietary hardware that networks route to Stripe receives the data.

## Overview

To set up processor-only Issuing, you begin by establishing an authorisation endpoint for real-time decisions, and integrating with the [Transaction](https://docs.stripe.com/api/issuing/transactions.md) APIs. This helps you stay informed about events from Stripe and the card network. These events also inform your ledger and daily settlement activities with the BIN sponsor.

After you set this up, Stripe creates the cardholder in your Stripe account, issuing a card to them on behalf of the BIN sponsor. For Issuer Processor configurations, there’s no funding of the cardholder account or the card itself, nor is there a central *Issuing Balance* held with one of Stripe’s partners. Instead, Stripe contacts your authorisation endpoint so you can approve or decline transactions based on the state of the cardholder’s balance (outside of Stripe).

From there, the *Acquirer* sends card transactions, such as authorisation or clearing, to Stripe through the card network. As Stripe receives these messages, they’re processed according to the authorisation responses received from you, or processed according to preconfigured spend controls or fraud tools.

Finally, the *Issuer* holds the financial account for settlement with the card network, and receives daily transfers from you to top up funds. Stripe calculates the amount to settle based on clearing files received from the card network so you can meet the funding obligation.

## Get started

Before you get started, you need to [create a Stripe account](https://dashboard.stripe.com/register), and [activate Issuing](https://dashboard.stripe.com/test/issuing/overview) in test mode.

### Funding responsibilities

When it comes to funding, you’re responsible for:

- Operating your card program with your bank, including program approval and settlement account setup.
- Defining the funding methodology, ledgering, and money movement.
- Creating and maintaining the ledger of cardholder balances using the Stripe [Disputes](https://docs.stripe.com/api/issuing/disputes.md), Transactions, and Settlement APIs, or events and transactions from your money’s wallet.

### Programme management

To set up your [programme management](https://docs.stripe.com/issuing/program-management.md):

- Sign a BIN sponsor in a licensed country and deploy it locally.
- License the BIN through the card network.
- Share BIN details with Stripe for installation.
- Develop onboarding flows that adhere to Know Your Customer (KYC) requirements.
- Implement compliance policies and procedures.
- Set up and configure a settlement account at an issuing bank.
- Submit wallet program requirements and pass certification for digital wallet setup.

## Set up your BIN

Setting up your BIN is a foundational step for an issuer-processor program. Complete these milestones to make sure your BIN is licensed, installed and configured correctly.

### Get your BIN licensed

Coordinate with your BIN sponsor to apply for and secure a BIN. This typically includes submitting required documentation and agreeing to the sponsor’s terms.

### BIN installation

After you license your BIN, email your BIN details to Stripe. Stripe works with your BIN sponsor and your networks to install the BIN. This involves provisioning the BIN in network routing systems and confirming connectivity with card networks and with Stripe. Stripe also sets up a secondary PIN or debit network, if applicable.

### BIN configuration

After your BIN is installed, Stripe, the networks, and the BIN sponsor work with you to correctly configure your BIN so that it supports your program specifications. Key tasks include setting BIN ranges, routing rules, authorisation and clearing parameters, and tokenisation settings. Stripe works directly with you and your BIN sponsor on this BIN configuration step.

### Penny testing

After the BIN configuration is complete, Stripe validates BIN configuration with test transactions on your behalf. After Stripe notifies you that your integration is ready for penny testing, work directly with your BIN sponsor on the timing and funding of these transactions.

You’re responsible for making sure that funds are in the settlement account for these transactions. We try to keep testing amounts under US$100 in total.

## Set up the back end

To set up the back end for the process-only model, see [Integrate processor-only Issuing](https://docs.stripe.com/issuing/processor-only-integration-guide.md).

### Handle transactions

You need to use the synchronous webhook to approve each authorisation based on the available balance for your cardholder ledger. Handling transactions has four distinct parts:

- [Real-time authorisations](https://docs.stripe.com/issuing/controls/real-time-authorizations.md): The primary mechanism for implementing business logic for approving or rejecting transactions, whether because of lack of funds, suspected fraud, or other reasons.

- [Transactions](https://docs.stripe.com/issuing/purchases/transactions.md): Familiarise yourself with the different transaction types that you can show to the cardholder. You can ignore references to balance transactions, because this concept doesn’t apply to this model.

- [Disputes](https://docs.stripe.com/issuing/purchases/disputes.md): Use the Disputes API to create a dispute, then provisionally credit the cardholder’s account outside of Stripe, and ahead of a win or loss outcome. Monitor the dispute. If the status is `lost`, the network increases your settlement obligation by the disputed amount at the end of the day. You can then recover these funds from the cardholder to meet the obligation.

- [ATM withdrawals](https://docs.stripe.com/issuing/purchases/atm-usage.md): ATM withdrawals aren’t enabled by default, so you need to [request approval](https://support.stripe.com/?contact=true) for your use case.

- [PIN management](https://docs.stripe.com/issuing/cards/pin-management.md): You can use the Stripe API and [Stripe Elements](https://docs.stripe.com/payments/elements.md) to manage and view PINs on your issued cards.

### Configure spend controls

To set up [spend controls](https://docs.stripe.com/issuing/controls/spending-controls.md), you must learn how to:

- Decline authorisations when you have a mismatch in [verification values](https://docs.stripe.com/api/issuing/authorizations/object.md#issuing_authorization_object-verification_data).

- Block higher-risk [Merchant Category Codes (MCC)](https://docs.stripe.com/issuing/controls/spending-controls.md) (for example, gambling in states where it’s banned).

- Block specific [countries](https://docs.stripe.com/issuing/controls/spending-controls.md) if you suspect fraud (for example, the card is in a different location to the application).

- Enable [SMS challenges](https://docs.stripe.com/issuing/controls/fraud-challenges.md).

- Ship deactivated cards using the activation flow.

- Deactivate [lost or stolen cards](https://docs.stripe.com/api/issuing/cards/object.md#issuing_card_object-status).

- Set up [transaction fraud controls and tools](https://docs.stripe.com/issuing/manage-fraud.md#transaction-fraud-controls-and-tools).

- Use [merchant categories](https://docs.stripe.com/issuing/categories.md).

- Manage [network tokens](https://docs.stripe.com/issuing/controls/token-management.md) on your cards.

- (Optional) Enrol cards in [3D Secure](https://docs.stripe.com/issuing/3d-secure.md).

## Set up the front end

Setting up the front end involves creating a design for your physical or virtual card.

### Create a card design

To create custom [physical cards](https://docs.stripe.com/issuing/cards/physical.md), you need to upload your design through the Stripe Dashboard. All designs require advance review by both the BIN sponsor and network. To avoid delays, submit your designs early, allowing ample time for turn-around and review of the printed cards.

> #### Digital card art
> 
> The process for digital card art is the same as that of physical cards. Ensure consistency between your physical and digital card art to maintain brand cohesion.

### Integrate 3D Secure (3DS)

For accounts that have enabled 3DS and use hosted flows, Stripe has partnered with providers to offer 3DS verification flows that you can partially co-brand. This integration simplifies the security process for your cardholders. However, this feature isn’t necessary when using in-app verification, also known as Issuer App Authentication.

### Legal, compliance, and marketing considerations

You and the BIN sponsor are responsible for handling the legal and compliance aspects of your card program. You must develop a cardholder agreement and a comprehensive terms of service (TOS). You need these documents to establish your card program’s legal framework, and to protect both your business and cardholders.

You’re also responsible for anything related to the marketing of your card program, including email campaigns, banner advertisements, and other promotional content. When creating these materials, work closely with your BIN sponsor to make sure that all content aligns with regulatory requirements and brand guidelines.

## Set up accounting practices

You need to have effective accounting practices for managing your Stripe Issuing program. From reconciling transactions to generating detailed reports, these processes help you remain transparent and compliant.

### BIN sponsor settlement

BIN sponsor settlement involves several tasks. First, you need to create and maintain a *ledger of cardholder balances* to keep track of all account activities. 

You must fund the account at the time of settlement by moving funds from individual demand deposit accounts (DDAs). Additionally, you’re responsible for reporting program details to the BIN sponsor, including information about cards, cardholders, and other relevant data.

### Reporting and data analysis

The Stripe Dashboard offers basic reporting capabilities, suitable for quick overviews and day-to-day monitoring. For more advanced reporting needs, you can use [Stripe Sigma](https://docs.stripe.com/stripe-data/how-sigma-works.md) to create custom reports using SQL queries.

If you require even more extensive data analysis capabilities, [Stripe Data Pipeline](https://docs.stripe.com/stripe-data/access-data-in-warehouse.md) lets you export Stripe data directly into your data warehouse. Use this feature if you have a businesses with complex reporting needs or if you want to integrate Stripe data with other business intelligence tools.

For in-house reporting, you can store webhook and API responses, such as [authorisations](https://docs.stripe.com/issuing/controls/real-time-authorizations.md) and [transactions](https://docs.stripe.com/issuing/purchases/transactions.md). This gives you detailed and customisable data for internal analysis.

## See also

- [Physical cards](https://docs.stripe.com/issuing/cards/physical.md)
- [Virtual cards with Issuing](https://docs.stripe.com/issuing/cards/virtual.md)
- [Replacement cards](https://docs.stripe.com/issuing/cards/replacements.md)