Glossary
Referral Code
A referral code in payment processing is an authorization code that signals the need for additional interaction between the merchant and the card issuer. This code is generated during a transaction when the payment card's issuing bank requires further information before approving the transaction. It effectively puts a hold on the transaction and prompts the merchant to contact the issuer's Voice Authorization Center.
When a merchant receives a referral code, it indicates that the issuer may need to verify certain aspects of the transaction or the cardholder's information, which could involve confirming the cardholder's identity, checking for unusual spending patterns, or verifying the legitimacy of high-value purchases. The referral could be triggered by a variety of factors, such as suspected fraudulent activity, unusual transaction amounts, or technical issues with verifying the card's details electronically.
To resolve a transaction flagged with a referral code, the merchant must manually call the designated Voice Authorization Center provided by the card issuer. During this call, the merchant will provide the transaction details and any other requested information. The issuer's representative will then guide the merchant through the steps required to authenticate the transaction or will inform the merchant if the transaction should be declined.
Handling a referral code correctly is crucial for maintaining security during card transactions, ensuring that payments are authorized properly and helping to prevent fraudulent activities. It also protects both the merchant and the cardholder by adding an additional layer of verification when needed.