What is a Refund Authorization?
When a refund is requested by the customer, merchants must request and receive an initial purchase return (refund) authorization from the credit card network issuing banks before submitting the refund for processing. This flow is similar to the payment capture flow where an authorization is required prior to capture. The refund authorization request is required weather dealing with a return of a purchased good or termination of a recurring payment or subscription.Why is a Refund Authorization Important?
As with the Transaction capture flow that first requires an authorization and only then allows capture, the flow provides more reliability both from fraud as well as faster updates for the cardholders that can see a pending Transaction. Similarly, the refund authorization flow ensures that the refund is legitimate and valid and that the funds will be returned to the customer promptly. It provides cardholders transparency and reliable updates of the pending refund.Vindicia Support and Compliance with the Refund Authorization Regulation.
Vindicia is integrated with many payment providers. Vindicia’s support for refund authorization regulation is based on how the payment providers defined their refund process. Vindicia sends the refund request and refund authorization to the payment provider on behalf of the merchant and receives the payment provider’s response and status updates for the authorization call. Vindicia will automatically process the refund capture upon receiving a successful refund authorization. See the following list for the supported Payment providers:- Paymentech