Transaction Status, Codes and Scenarios

When working with card transaction APIs, you may encounter various transaction statuses, codes, and terms that describe how a payment is authorized, settled, adjusted, or reversed. This guide explains common transaction scenarios and exceptions in plain language. The goal is to help you better understand what each status or code means and how it relates to real-world payment behaviour.

1. Force Post vs. Forced Debit

Force Post (Authorized Forced Completion)

Force post refers to a merchant completing a transaction for settlement based on a valid prior authorization, even if the transaction does not follow the typical capture flow. This is common in "authorize first, settle later" industries and is generally considered legitimate as long as a valid authorization exists. Typical examples include hotels, car rentals, pay-at-the-pump fuel and restaurants (tips). In these cases, the final settled amount may be higher or lower than the original pre-authorization.

Common Scenarios

1. Pre-authorization > Final amount
   A car rental merchant places a $500 pre-authorization deposit. At return, the final cost is $350 ($300 rental + $50 fuel). The merchant completes settlement for $350, and the remaining $150 is released back to the available balance.

2. Pre-authorization < Final amount
   A hotel places a $200 pre-authorization at check-in. At checkout, the final amount is $280 (e.g., minibar or other paid services). The merchant completes settlement for $280 according to the applicable rules and evidence of authorization.

Forced Debit (Unauthorized or Policy-Violating Debit)

Forced debit typically refers to funds being debited without the cardholder's valid authorization, or in a way that violates the agreed terms (e.g., charging after a cancellation). It is often associated with fraud or disputes.

Common Scenarios

1. A merchant continues charging after the user cancels a subscription.

2. Fraudsters use stolen card details (PAN, expiry, CVV) to initiate unauthorized transactions.

3. A merchant charges excessive amounts after the service ends (e.g., claiming damages or penalties) without proper proof or agreement.

Note:

In industry usage, force post is usually linked to a valid prior authorization, while forced debit is more commonly used in dispute or fraud context. If your API uses the same code or label for both, keeping the two sub-sections above helps clarify the difference in practice.

2. Unauthorized Transaction (Card Fraud)

Unauthorized transaction (card fraud) refers to transactions initiated by a fraudster using payment card information without the cardholder's permission (e.g., card number, expiry date, CVV). This often results in an unauthorized debit.

If you suspect an unauthorized transaction, freeze or lock the card immediately and verify key details such as the amount, merchant, time, and device or IP (if available). Then notify the issuer or issuing partner and flag the transaction as suspected fraud. A dispute may be raised, and a chargeback may apply depending on the case and applicable scheme rules.

3. Negative Card Balance

A negative card balance occurs when the final debited (settled) amount becomes greater than the available card or budget balance. In practice, this means the card or budget temporarily shows an amount below zero because the system has posted a debit that the available balance could not fully cover.

Common Scenarios

1. Final settlement exceeds the available balance (e.g., force post / forced debit)
   This can happen when an authorization is followed by a higher final settlement, or when a debit is posted unexpectedly. It is more likely to occur if the card or budget balance is low at the time the transaction is settled.

2. FX fees or cross-border charges increase the final debited amount
   The authorized amount may match the available balance at the time of authorization, but additional FX fees or cross-border charges can make the final posted amount higher than the original authorization.

Negative balance policy

If a card or budget balance becomes negative, Interlace may take no immediate action provided the customer tops up the affected card or budget promptly. Interlace performs balance checks on the 1st and 15th of each month. If a negative balance is detected, Interlace may apply account restrictions and initiate recovery of the outstanding amount. If the negative balance is not repaid within the required timeframe, an offboarding process may apply.

Repayment methods

MoR Mode

Customers may repay manually by topping up the Infinity Account and transferring funds to the card or budget with the negative balance. If the balance is not repaid within the allowed timeframe, Interlace may debit the Infinity Account automatically to cover the outstanding amount (subject to the applicable arrangement).

Gateway Mode

Currently, the system does not automatically debit the master or sub Infinity Account balance to repay a negative card or budget balance. Customers must repay manually by transferring funds to the card or budget with the negative balance via the Intra-account business transfer or Different-account business transfer APIs. Automated repayment may be introduced in the future.

4. Authorization Released

Authorization released means a previously held authorization amount is unfrozen and returned to the card's available balance. No final debit is posted for that released amount. This is also commonly referred to as a hold being removed.

Common Scenarios

1. Partial release after settlement
   A hotel authorizes $200. The final settled amount is $180, so the remaining $20 is released back to the available balance.

2. Authorization expiry
   The merchant does not complete settlement within the allowed time window, so the authorization is released automatically to prevent the funds from being held indefinitely.

3. Merchant-initiated release
   The order is canceled, or the merchant decides not to proceed and releases the authorization.

5. Refund

A refund occurs after a transaction has been completed and settled (i.e., funds have already moved to the merchant). The merchant returns funds to the cardholder through a new and separate transaction that moves money in the opposite direction. The purpose of a refund is to correct a completed debit, rather than canceling an authorization before posting. Refunds may be full or partial, and the refund amount does not always match the original purchase amount (e.g., when only a price difference is returned).

Common Scenarios

1. Return and refund
   The user returns goods or cancels a service after settlement and receives a refund.

2. Price adjustment / discount protection
   The user requests a partial refund because the item later becomes discounted or a promotion is applied retroactively.

3. Dispute-driven refunds
   A dispute is raised and the merchant agrees to refund after investigation.

4. Chargeback outcomes
   If a chargeback is upheld under the applicable scheme rules, the merchant may be required to return funds to the cardholder.

6. Reversal

Reversal is the cancellation of an authorization before final settlement completes, intended to prevent the debit from happening. A successful reversal typically releases the held amount back to the available balance.

Common Scenarios

1. The user cancels immediately after payment, or the merchant cancels due to out-of-stock.
2. Risk systems detect suspicious activity and trigger a reversal to protect the cardholder.

7. Recurring Payment

Recurring payment is a payment method where the cardholder authorizes a merchant to charge the card automatically on an agreed schedule. After the initial authorization, the merchant may initiate subsequent charges using the saved payment credentials, without requiring the cardholder to confirm each transaction.

Common Scenarios

• Software subscriptions, membership renewals, etc.

8. Dispute vs. Chargeback

Dispute is the process where a cardholder challenges a transaction (e.g., goods not received, not as described, unauthorized transaction) and requests investigation and a refund.

Chargeback is a formal process initiated through the issuer under card scheme rules, typically when a merchant refuses to refund or the dispute escalates. Funds may be provisionally reversed from the merchant while the case is reviewed, and the merchant may respond with evidence to contest the chargeback.

Common Chargeback Reasons

1. Fraud / unauthorized transaction
   The cardholder did not authorize the transaction (e.g., stolen card details were used). This is one of the most common chargeback reasons.

2. Goods or services not received
   The cardholder paid but did not receive the goods or services (e.g., the order was never delivered, delivery is significantly delayed, or the service was not provided as promised).

3. Not as described (materially different)
   The goods or services were received, but they are materially different from what was advertised or described (e.g., wrong item, missing key features, counterfeit items, or significantly lower quality than stated).

4. Duplicate charge
   The same purchase was charged more than once (e.g., the cardholder sees two or more charges for a single order due to a system error or repeated processing).

5. Refund not received
   The merchant agreed to issue a refund, but the cardholder did not receive it within a reasonable timeframe, or only received part of the promised refund.

6. Subscription cancellation but still charged (recurring payment issues)
   The cardholder canceled a subscription or recurring payment arrangement, but the merchant continued charging the card afterward. This may also occur when cancellation terms were not properly applied or the recurring billing was not stopped.

7. Merchant misconduct / unfair charging practices
   The merchant charges the cardholder in a way that violates the agreed terms or lacks proper authorization or evidence. Examples include unauthorized forced debit, charging excessive penalties without valid proof, or posting charges after the service has ended without an agreed basis.