Setup for Galileo Secured Credit
When setting up a Galileo's Secured Credit product, you must work with the sponsor bank and card network to create a business plan that meets bank and network requirements. This guide describes considerations for Galileo Secured Credit product.
Obtaining bank and network approval
Before you can offer a secured credit product, you must get a sponsoring bank. The bank that holds your customer accounts may not sponsor secured credit. If this is the case, you will need to use a separate sponsor bank for secured credit.
When you set up a secured credit product, you are adding a new program with new BINs. You will need approval for the new BINs from both your sponsor bank and from the card network. From the card networks’ perspective, the card behaves more like a DDA than revolving credit, so it is important to be clear about why you want a credit BIN. You can ask your Galileo representative to help you with your conversation with the network to avoid misunderstandings.
Underwriting and cardholder qualifications
Galileo does not provide underwriting. You must partner with a third-party underwriter to insure the accounts and to determine what qualifications a cardholder must have, such as minimum FICO score and minimum age.
Fees and interest
If you decide to set up fees for your Galileo Secured Credit product, you determine what kinds of fees to assess, the fee amounts, and when and how to assess them. For secured credit products, Galileo supports either monthly or annual fee assessment with the Assess Fee endpoint. Your Galileo representative can help you set up fee types for your program.
If you charge interest, you will need to calculate the amount and assess it from your own system. While there is a pending dispute on an account, you are responsible for stopping the accrual of interest and for adjusting the stoppage when the dispute is resolved.
Collateral account and money movement
For Galileo Secured Credit product, movement of funds into the collateral account is not automated by Galileo.
- The account that funds are moved from must be an account capable of holding and transferring money, such as a Galileo-hosted DDA, savings account, or an external spending account. Other types of accounts are possible as well.
- You determine when and how the cardholder can move funds into and out of the collateral account.
- You can move funds into the collateral account with a Create Account Transfer request.
- You can move funds out of the collateral account with either a Create Adjustment or a Create Payment request.
- Your sponsor bank may have conditions for allowing customers to move funds out of the collateral account.
Billing cycles
Galileo offers billing cycle configurations for consumer and corporate secured products, which can be configured at either the program or product level, according to your business plan and the agreement with your sponsor bank. All billing cycle configurations are available for credit reporting. See Configuring Billing Cycles for more information
Enable autopay
Autopay enables your customers to pay the full balance of the previously calculated billing cycle every month through scheduled, recurring transfers. This automated process helps ensure customer’s bills are paid regularly and on time. Autopay currently only applies to secured credit and payments for the full statement amount from a qualifying Galileo account to a credit account. Galileo does not support partial payments, fixed payment amounts, or minimum payment amounts.
To be eligible for autopay, you must have billing cycles enabled so Galileo knows when a payment is due and for what amount. You also must be integrated with the Events API to receive autopay-related events.
For information on implementing autopay in your system, see Enabling autopay in Developer Setup for Galileo Secured Credit.
Delinquency, default, and collections
For secured credit products that have a charge card, Galileo determines delinquency based on the first day of the customer's billing cycle and payment rules on the account. You determine when to send an account to collections. You may consider setting up a grace period before a delinquent account is defaulted. It is also common to set a spending block on delinquent accounts. Set up your internal system according to your business plan.
Note
Galileo can handle reporting only for secured credit products that operate as a charge card with the full amount due each period, and not other credit products like secured cards with revolving credit.
For general information, see Credit Reporting at Galileo.
You provide your own terms and conditions to state what happens when a cardholder does not pay back the credit line. Galileo does not automatically move funds from the secured credit account to pay back the amount owed. If necessary, you may have a debt facilitator assist with collections. Galileo does not recommend that you close the account when the cardholder defaults, but that you block spending instead.
Reporting to credit bureaus
There is no legal requirement to report credit account activity to the three credit bureaus. Whether you report the charge card activity to the credit bureaus depends on whether you believe your cardholders will benefit from it. For more information on credit reporting, see the Credit Reporting at Galileo.
Chargebacks and disputes
For charge cards associated with a secured credit product, you may be able to use the same chargeback process that you have for debit cards if the card network is the same. However, you are responsible for setting up your own internal process to handle disputes for fees and interest for the secured credit product. There is no provisional credit for a charge card.
Statements and invoices
You can use RDFs and your own internal reporting to generate statements and invoices according to your agreement with your sponsoring bank. You can change the frequency of invoices depending on how far ahead you can float transactions. For example, you could have two billing cycles per month, or set up weekly billing cycles. See Configuring Billing Cycles for more information.
CST support for Galileo Secured Credit
This section describes features in the CST related to secured credit.
Billing cycles
| CST field | Location | Description |
|---|---|---|
| Next Billing Date | Account Info > Account Details > Summary Information | The customer’s next billing cycle start date. |
Galileo setup
| Parameter | Level | Description |
|---|---|---|
| ALWNB | Product | Controls whether a call to the Create Adjustment endpoint can drive an account balance negative. When this parameter is set to 1, a call to the Create Adjustment endpoint can drive the balance negative. |
| BCDAY | Product | Controls the length of time to wait after the bill cycle start date before setting the bill cycle and assessing fees. Use an integer to specify the number of days or MONTH to indicate a one month bill cycle. |
| CYCLE | Product | Controls whether to assess maintenance fees monthly (MON) or yearly (YER). Weekly assessment is not available for secured credit products. Works in conjunction with CYMET. |
| CYDAY | Product | Specifies the day of the month to assess fees when CYCLE is set to MON. Valid values are 1–28. Weekly assessment is not available for secured credit products. |
| CYMET | Product | Controls whether to assess a fee by account (PRN) or balance (bal_id). This parameter also controls what happens if the balance is lower than the fee amount. Values for secured credit products are:A — Set an independent bill cycle for each account and assess fees by account.B — Set the same bill cycle for all accounts on the same balance and assess fees by balance.HAD — Hybrid account. Assess fees by account and defer the fee if it will drive the balance negative.HAP — Hybrid account. Assess fees by account and charge a partial fee if the entire fee will drive the balance negative. This effectively takes the balance to 0.HBD — Hybrid account. Assess fees by balance and defer the fee if it will drive the balance negative.HBP — Hybrid account. Assess fees by balance and charge a partial fee if the entire fee will drive the balance negative. |
| BRCDT | Program or Product | Controls the customer billing cycle date. Values for secured credit products are:ACCOUNT_DATE — Sets the billing cycle date to the day that the account is created. If an account is created on day 29, 30, or 31, then the billing cycle date is 28. Yields 28 possible billing cycle dates. 1, 8, 16, 24 — Sets the billing cycle date based on the week that the account is created. Possible dates are 1, 8, 16, and 24. Yields four possible billing cycle dates. |
Updated about 1 month ago