About hierarchies

Hierarchies are used to create and sustain relationships between the entities that your organization implements into your transaction processing structure.

The front-end hierarchy

The front-end hierarchy refers to a data and reporting structure made up of the entities that participate in the authorization and capture stages of transaction processing. They include BINs, agents, chains, merchants, stores, and terminals.

BINs, merchants, and terminals are required components of the front-end hierarchy. Agents, chains, and stores offer the opportunity to introduce more structure and precision to the hierarchy, and are required also.

The members of the front-end hierarchy relate to each other in the following manner:

• BINs (Bank Identification Numbers): The first and highest level of the front-end hierarchy. They represent the financial institution that authorizes transactions for the lower levels of the hierarchy.
• Agents: The second level of the front-end hierarchy. They can represent a collection of chains that are grouped together by a common attribute (industry sector or geographic location, for example).
• Chains: The third level of the front-end hierarchy. They represent a collection of associated merchants.
• Merchants: The fourth level of the front-end hierarchy. They represent the business entity that captures transactions with the bank.
• Stores: The fifth level of the front-end hierarchy. They represent the merchant's physical location.
• Terminals: The sixth and lowest level of the front-end hierarchy. They represent the point of sale.

The back-end hierarchy

The back-end hierarchy refers to a data and reporting structure that is comprised of the entities that participate in the clearing and settlement stages of transaction processing. They include banks, groups, associations and merchants.

Banks, associations, and merchants are required components of the back-end hierarchy. Groups and associations offer the opportunity to introduce more structure and precision to the hierarchy. Groups are an optional component of the hierarchy.

The members of the back-end hierarchy relate to each other in the following manner:

• Banks: The first and highest level of the back-end hierarchy. They represent the financial institution that clears and settles transactions for the lower levels of the hierarchy. Options that you set at the bank level are inherited at the association and merchant levels.
• Groups: The second level of the back-end hierarchy. They can represent a collection of associations or merchants that are grouped together by a common attribute (industry sector or geographic location, for example), or they can represent a collection of other groups.
• Associations: The third level of the back-end hierarchy. They represent a collection of associated merchants. Options that you set at the association level are inherited by merchants.
• Merchants: The fourth and lowest level of the back-end hierarchy. They represent the merchant that conducts their transactions through the bank.