Technical
Void
Definition
Void cancelling an authorized but not yet captured transaction. Voids release the authorization hold immediately and incur no interchange (in most cases). Must be processed before batch settlement. After settlement, the merchant must process a refund instead. Voids are the cleanest way to cancel a transaction that shouldn't proceed.
Related Terms
Authorization
The process of requesting approval for a card transaction from the issuing bank. The authorization request includes card details, amount, and merchant information. The issuer checks available credit/funds, fraud rules, and account status before responding with an approval or decline. Authorization is the first step - funds are reserved but not transferred until capture.
Refund
Returning funds to a cardholder for a previously captured/settled transaction. Refunds create a new credit transaction. Original interchange may not be refunded depending on network rules and timing. Some acquirers charge per-refund fees. High refund rates can trigger acquirer scrutiny. Refund instead of void when transaction has already settled.
Capture
The process of finalizing a previously authorized transaction for settlement. Capture confirms the transaction amount and initiates fund transfer. Must occur within the authorization validity period (typically 7-30 days depending on MCC). Some merchants auto-capture immediately; others delay until fulfillment. Pre-auth + delayed capture is common for hotels, car rentals, and advance bookings.
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