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Transaction Types

Understanding the different transaction types helps you choose the right one for each business scenario.

Overview​

TypePurposeWhen to Use
SaleImmediate paymentStandard purchases
Pre-AuthorizationReserve fundsHotels, rentals, restaurants
CompletionCapture reserved fundsAfter pre-auth, when ready to charge
RefundReturn moneyAfter settlement, customer returns
ReversalCancel transactionBefore settlement, immediate cancel

Sale​

A standard payment that immediately charges the customer's card.

How It Works​

  1. Customer presents card
  2. Funds are authorized
  3. Transaction is captured
  4. Funds settle at end of day

Use Cases​

  • Retail purchases
  • Restaurant bills (when tip is included)
  • Any immediate, final charge

Key Points​

  • Funds are captured immediately
  • Settlement happens at end of day
  • Can be voided before settlement
  • Can be refunded after settlement

Pre-Authorization​

Reserves funds on a customer's card without capturing them. The hold typically lasts 7-30 days depending on the card issuer.

How It Works​

  1. Customer presents card
  2. Funds are authorized (held)
  3. Card limit is reduced by hold amount
  4. No funds are captured yet
  5. Later: capture or void

Use Cases​

  • Hotels – Authorize at check-in, capture at checkout
  • Car rentals – Hold for security deposit
  • Restaurants – Authorize meal amount, capture with tip later
  • Gas stations – Pre-authorize before pumping

Key Points​

  • Reduces customer's available credit
  • Does not charge the customer
  • Must be captured to complete the transaction
  • Expires if not captured (7-30 days)

Completion (Capture)​

Finalizes a pre-authorization by capturing the reserved funds.

How It Works​

  1. Reference the original pre-auth UTI
  2. Specify the capture amount
  3. Funds are captured
  4. Settlement happens at end of day

Capture Amount Rules​

ScenarioAllowed
Capture = Pre-auth✓ Yes
Capture < Pre-auth✓ Yes (partial capture)
Capture > Pre-auth✗ No (will be declined)

Use Cases​

  • Hotel checkout (final bill may differ from initial hold)
  • Restaurant (adding tip to original amount)
  • Rental return (adjusting for actual usage)

Key Points​

  • Can capture less than pre-authorized
  • Cannot capture more than pre-authorized
  • Once captured, cannot be voided (use refund)

Refund​

Returns money to the customer's card after a sale has been settled.

How It Works​

  1. Initiate refund with amount
  2. Customer presents card
  3. Funds are credited to customer
  4. Customer sees credit on statement (3-5 business days)

Refund Types​

TypeDescription
Full refundReturn entire transaction amount
Partial refundReturn portion of amount

Use Cases​

  • Product returns
  • Service cancellations
  • Price adjustments
  • Duplicate charge corrections

Key Points​

  • Works on settled transactions
  • Requires customer's card
  • Can issue multiple partial refunds
  • Customer sees credit in 3-5 business days

Reversal (Void)​

Cancels a transaction before it settles. The transaction is removed from the batch entirely.

How It Works​

  1. Reference the original transaction UTI
  2. Transaction is cancelled
  3. No funds are captured
  4. Customer's hold is released

Use Cases​

  • Customer changes mind immediately
  • Incorrect amount entered
  • Duplicate transaction
  • Any same-day cancellation

Key Points​

  • Only works before settlement
  • Does not require customer's card
  • Instant cancellation
  • No trace on customer's statement (hold released)

Reversal vs Refund​

AspectReversalRefund
TimingBefore settlementAfter settlement
Card requiredNoYes
Customer impactHold releasedCredit issued
StatementNo entryRefund entry appears
Processing timeInstant3-5 business days

Settlement Time​

Transactions settle daily at:

SeasonTime
Winter (GMT)01:00 UK time
Summer (BST)02:00 UK time

Transaction Lifecycle​

                    ┌─────────────┐
                    │    Sale     │
                    └──────┬──────┘
                           │
              ┌────────────┼────────────┐
              │            │            │
              ▼            │            ▼
        ┌──────────┐       │      ┌──────────┐
        │ Reversal │       │      │ Settled  │
        │ (Void)   │       │      │          │
        └──────────┘       │      └────┬─────┘
                           │           │
                           │           ▼
                           │     ┌──────────┐
                           │     │  Refund  │
                           │     └──────────┘
                           │
                    ┌──────┴──────┐
                    │  Pre-Auth   │
                    └──────┬──────┘
                           │
              ┌────────────┼────────────┐
              │            │            │
              ▼            ▼            ▼
        ┌──────────┐ ┌──────────┐ ┌──────────┐
        │ Reversal │ │ Capture  │ │ Expires  │
        │ (Void)   │ │          │ │ (7-30d)  │
        └──────────┘ └────┬─────┘ └──────────┘
                          │
                          ▼
                    ┌──────────┐
                    │ Settled  │
                    └────┬─────┘
                         │
                         ▼
                    ┌──────────┐
                    │  Refund  │
                    └──────────┘