Understanding EMV (Understanding ISO-8583 Messages Part 1)

ISO 8583 in a sample transaction

ISO 8583 is a messaging standard that is widely used in the financial industry to enable electronic financial transactions. It defines a set of message types, data elements, and transmission protocols that allow for the exchange of financial transaction information between different systems.

The ISO 8583 standard was first introduced in the 1980s and has since been adopted by many financial institutions around the world. It is used in a variety of payment systems, including credit card processing, ATM networks, and point-of-sale systems.

One of the key benefits of ISO 8583 is its flexibility. The standard allows for a wide range of transaction types and data elements, so it can be customized to fit the needs of different payment systems. It also supports a variety of transmission protocols, including TCP/IP, X.25, and SNA, so it can be used in different network environments.

ISO 8583 messages are typically exchanged between two systems: a point-of-sale device or ATM, and a payment processing network.

An ISO 8583 message is made of the following parts:

• Message type indicator (MTI)
• One or more bitmaps, indicating which data elements are present. It consists of primary bitmap and secondary bitmap. The first bit of the primary bitmap indicates whether the secondary bitmap is present or not.
• Data elements, the actual information fields of the message

An Example of ISO-8583 Request Message Explained

01003C0000000000001A123456789012345678900000000000025001234561234ABCD

This is an Example of an ISO-8583 Authorization request message. ( this is how some ISO messages are being exchanged ).

MTI:     0100
Bitmap:  3C00000000000000
------------------
Data Elements:
------------------
DE002:   1234567890123456789
DE003:   000000
DE004:   000000002500
DE011:   123456
DE041:   1234ABCD

An Example of ISO-8583 Response Message Explained

0110380000000000001A12345678901234567890000000000002500123456ABCDEF12001234ABCD094D5942414E4B30312020202020202020

MTI:     0110
Bitmap:  3800000000000000
------------------
Data Elements:
------------------
DE002:   1234567890123456789
DE003:   000000
DE004:   000000002500
DE011:   123456
DE037:   ABCDEF12
DE039:   00
DE041:   1234ABCD
DE042:   MYBANK01     // this could be the name of the acquirer bank

Note that the response message includes the same Data Elements as the request, but with additional fields such as DE037 (Retrieval Reference Number) and DE042 (Acquiring Institution Identification Code), as well as a response code in DE039 indicating the status of the authorization request. The specific response codes and meanings can vary depending on the payment network and processing system being used.

As we can seen from the above example we can see that ISO-8583 contains MTI, BITMAP, DATA ELEMENTS.

Even though these examples above might be a bit confusing for now, We will dive deeper in the next articles to come where we will discuss about MTI, BITMAP and DATA ELEMENTS

In summary, ISO 8583 is a messaging standard that is widely used in the financial industry to enable electronic financial transactions. Its flexibility and support for different transmission protocols make it a popular choice for payment systems around the world. If you’re a software engineer interested in EMV or payment systems, understanding ISO 8583 is an important first step.