Types of transaction
From : builder.com.com
All credit card processing is done within transactions. To a Web site owner, the most important type of transaction is a sale transaction. The other types of transactions are preauth, postauth, credit, and chargeback.
Sale: A sale is when the card hold purchases a product or service from a merchant, and the money is transferred to the merchant's account.
Preauth: A preauth is a transaction where no money is transferred. Typically, a preauth is done to check that a credit card is valid, and the usual amount for a preauth is $1.00.
Postauth: A postauth involves purchasing something before it is shipped. The customer can preorder something, and the amount is deducted from the customer's credit limit. No money is transferred, but the card hold is maintained on the customer's card. When the merchant fulfills (typically, ships the product), the merchant can perform a postauth to transfer the money and remove the card hold from the customer's card.
Credit: A credit is the opposite of a sale. A merchant transfers money from its account into a customer's account.
Chargeback: A chargeback occurs after a customer disputes a charge made to his or her card. Charge backs are expensive and time-consuming to deal with. When a customer disputes a billing, the bank withdraws the amount from the merchant account and deposits it temporarily back into the customer's account. The merchant then has a certain number of days to justify the billing. If the merchant justifies the billing to the bank's satisfaction, the money is again transferred from the customer's account into the merchant's account. The bank then also bills the merchant some amount per chargeback. Chargeback fees are specific to the merchant's bank.
All credit card processing is done within transactions. To a Web site owner, the most important type of transaction is a sale transaction. The other types of transactions are preauth, postauth, credit, and chargeback.
Sale: A sale is when the card hold purchases a product or service from a merchant, and the money is transferred to the merchant's account.
Preauth: A preauth is a transaction where no money is transferred. Typically, a preauth is done to check that a credit card is valid, and the usual amount for a preauth is $1.00.
Postauth: A postauth involves purchasing something before it is shipped. The customer can preorder something, and the amount is deducted from the customer's credit limit. No money is transferred, but the card hold is maintained on the customer's card. When the merchant fulfills (typically, ships the product), the merchant can perform a postauth to transfer the money and remove the card hold from the customer's card.
Credit: A credit is the opposite of a sale. A merchant transfers money from its account into a customer's account.
Chargeback: A chargeback occurs after a customer disputes a charge made to his or her card. Charge backs are expensive and time-consuming to deal with. When a customer disputes a billing, the bank withdraws the amount from the merchant account and deposits it temporarily back into the customer's account. The merchant then has a certain number of days to justify the billing. If the merchant justifies the billing to the bank's satisfaction, the money is again transferred from the customer's account into the merchant's account. The bank then also bills the merchant some amount per chargeback. Chargeback fees are specific to the merchant's bank.
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