This is the first in a series of articles explaining card payments, systems and products. Here, we explain who does what, in a typical payments process, the main payments actions and events (and the difference between the two), and Worldpay’s approach.
There are six main players in standard credit card transactions:
Credit card payments are processed in three separate phases:
These are the main actions and events that may occur during a typical card payment – but what’s the difference?
|Authorize||An action instructing the merchant’s payment processor to check if the cardholder can complete the transaction – i.e. is there an active account with enough funds available? If so, authorization reserves the funds and starts the clock on settling the transaction.|
|Authorized||An event that says yes, there’s an active account; yes, it contains enough money; yes, funds are potentially reserved; and yes, the clock is now ticking on settling the transaction.|
|Sale||A single action that reserves available funds and also starts settlement (i.e. both authorize and settle).|
|Refused||Event notifying the merchant that the payment request has been declined, either by the issuing bank, by the merchant bank or by a risk tool. A risk tool is a product that automatically prevents fraudulent payments from being processed before they can be authorized – for example, by preventing payments from cards issued in specific countries.|
|Error||An event showing that a request was invalid or could not be processed.|
|Cancel Authorization||An action instructing the cancellation of an authorization and removal of the reservation on funds in the cardholder’s account.|
|Sent for Cancellation||An event notifying a merchant bank that a previous authorization has been cancelled and the payment can no longer be acted upon.|
|Settle||An action that starts the settlement process and begins the transfer of funds from the cardholder’s account to the merchant’s account.|
|Sent for Settlement||An event confirming that the settlement process has been started with the merchant bank and the issuing bank.|
|Refund||An action that begins a refund process that allows the return of funds from a merchant’s account to a cardholder’s account.|
|Sent for Refund||An event confirming that the refund action has been started with the merchant bank and issuing bank.|
|Reverse||An action to begin either a cancellation or a refund when it is unknown whether a Settle action has already been processed.|
Rate this article
Search our documentation, API references and articles.
Got any feedback or bugs to report?
To discuss how we can help your business, or to learn more about us, just get in touch.
Ask our developer community.