2 PAYMENT METHOD PROFILES: CARD
Fraud/Authentication Process Card payments can use a variety of authentication processes as decided by the merchant. These include contactless, signature and PIN entry in the card-present environment, and 3D Secure for CNP transactions. Authentication methods are often dependent on merchant industry, fraud risk and volume of POS sales throughput. Chargebacks are the dispute resolution mechanism used by the card industry. Consumers are able to request chargebacks via their issuing banks and merchants are able to dispute them. The card networks operate as the “referee” determining ultimate liability in middle of this system. Cross-Border/FX Capability International transactions, which involve payments between a consumer whose issuing bank is outside the merchant location’s country, can be performed using most card types. The process follows the typical transaction flow, with the customer initiating a purchase, providing their card details to the merchant’s payment processor who then send the authorization request to the card network, who forwards the message to the cardholder’s issuing bank. The issuing bank will then verify the cardholder’s account balance and determine whether to approve or decline the transaction. With cross-border payments, currency conversion may be required if the payment is made in a currency different from the cardholder’s account currency. Prior to settlement, the card network or processor will perform currency conversion. The transaction is then processed and settled, transferring funds from the cardholder’s issuing bank to the merchant. Refunds Customers dissatisfied with a purchase may request a refund. Depending on the merchant’s return policy, a customer may receive store credit or money back after requesting a refund. When requesting money back, the business will typically credit the refund to the customer’s original form of payment, meaning credit card transactions cannot typically be refunded in cash. However, some merchants may offer cash refunds for debit card purchases. On credit card transactions, the merchant sends the refund from their acquirer to the cardholder’s credit card network. The credit card network then routes the refund to the credit card issuer and the issuer applies the refund to the cardholder’s statement. For a debit card transaction, the debit card issuer credits the cardholder’s bank account.
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