Glossary
Cancel a Payment
Canceling a payment is an action a merchant can take when they decide not to proceed with processing an authorized transaction. This decision can be based on various factors, such as detecting a high risk of fraud or an error in the order. Canceling is only possible before the payment has been captured; that is, before the funds have been transferred from the customer's account to the merchant's account.
When a payment is authorized by the customer’s bank, it simply means the funds have been verified and are set aside for the transaction. If the merchant decides to cancel the transaction during this stage, the authorization is voided, and no funds are transferred. The reserved funds are released back into the customer's available balance.
However, if the transaction has already been captured, meaning the funds have been officially transferred to the merchant, the merchant cannot simply cancel the transaction. Instead, they must initiate a refund process to return the funds to the customer.
Modifications (Captures, Cancels, and Refunds): These actions — captures, cancels, and refunds — are collectively referred to as modifications because they alter the state of an originally authorized payment request. Each serves a different purpose in managing the transaction flow and financial reconciliation between the merchant and the customer:
Understanding and managing these modifications effectively is essential for maintaining transaction integrity, customer satisfaction, and financial accuracy.