Card Transaction Types
Welcome to the world of card transaction types. Read on to see the big players in this world and a general overview of various card transaction types.
Today, we’re going to be talking about card transaction types. We’re gonna give you a general quick overview of how everything looks like. If you want more detailed information, please check out any of our transaction type videos.
So, who are the big players?
Well, we have you — the merchant, we have the payment gateway — SecurionPay, the acquiring bank (which is the bank of merchant), the card organization here on top, the issuing bank — which is the bank of the customer, and, there, the happy customer.
So, what does a charge or a sale look like?
Well, it’s initiated by our happy customer. They decide that they want to purchase one of your products and/or services. The merchant sends that charge request to the payment gateway, which informs the acquiring bank. The acquiring bank informs issuing bank about the charge, and they check whether the customer has those funds. If so, the financial transaction is complete and the merchant is informed. They could then send the product and/or service to the customer.
If the merchant decides that they want to refund any of the transactions, they can do so fully or partially. That refund request is sent to SecurionPay, which sends the information to the acquiring bank, which then sends the money to the issuing bank, giving the customer back their funds.
Authorization and capture
A lot of merchants decide to go with authorization and capture. This is a two-phased approach and only in the second phase, in the capture, does it become a financial transaction, and this is what it looks like?
Again, it’s initiated by the customer, they’re purchasing one of your products and/or services. The authorization request is sent to SecurionPay, which informs the acquiring bank, the acquiring bank informs the issuing bank about the authorization, the funds are then blocked on the customer’s account.
In this time period, the merchant can verify whether they want to complete the transaction or not. Also, if they want to cancel it, they can void it, sending the void information via the payment gateway through the acquiring bank to the issuing bank, which then unblocks the block.
If the financial transaction wants to be completed, the merchant issues a capture. The capture request is sent to SecurionPay, informing the acquiring bank. The capture is sent to the issuing bank, which then takes the money from the customer, completing the financial transaction and, of course, informing the merchants at the end via SecurionPay. So, what can go wrong in these situations.
There could be some sort of technical issues with the acquiring bank or the risk of fraud is too high. The acquiring bank decides to cancel the transaction. There could be a technical issue at the issuing bank or the customer doesn’t have adequate funds against blocking the transaction. Either way, the relevant issuer decline codes or information is sent via SecurionPay to the merchant.
Now, say that we have a naughty fraudulent customer. They want to issue a chargeback. They go to the issuing bank, the bank decides: ‘OK, going with the chargeback, this is our customer.’ They inform the card authorization and the acquiring bank. The acquiring bank has to cover that organization and the acquiring bank. The acquiring bank has to cover that 25 euro charge. The charge information is sent to SecurionPay, which informs the merchant, the merchant has to cover that 25 euro or more fee, they get higher chargeback ratio, and they have to refund the costs.
So, what do we do at SecurionPay to prevent this?
First of all, we have a wide variety of anti-fraud technologies to prevent fraudulent activity and we offer our non-invasive 3D Secure which shifts the liability from the acquiring bank, the merchant, to the issuing bank.
And what does this do? If you’re a merchant and you have 3D Secure, and the customer decides that they want to file a chargeback, the issuing bank then has to cover the costs and everything else. No costs on the merchant.
So, in summary, card online payments are fast and easy, they’re very convenient for the customer, they’re safe and secure, and extremely flexible.
If you want more detailed information about any other transaction types, check out those relevant videos.
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