Here’re differences between void, reversal, refund, installment, and recurring transactions. These are useful to understand payment transactions quickly.
Void Vs Reversal Vs Refund Vs Installment Vs Recurring
Transaction #1: Recurring
The best example is the post-office recurring transactions. Every month you will pay a certain fixed amount as a recurring deposit.
In the recurring payments, the amount is fixed.
So, the other best examples are recurring payments to the merchant, for the purchases you made like Cloth, Gold, House rent, etc.
Transaction #2: Installment
In the installment, the amount is not fixed. The best examples are Hospitals and Lodges.
In the Hotel, while check-in you pay some amount as a deposit for 3 days.
Later due to some work you extended to 5 days. So the remaining amount you need to pay to the merchant.
That payment is called installment transactions. Here you paid two times.
Transaction #3: Void
The Void transactions you can call them as canceling or ignoring the transaction.
Only the current transaction you can make it as Void.
Transaction #4: Reversal
Reversal transactions are something initiated when the transactions do not pass through some of the business rules.
- The reversals are system generated reversals and Issuer generated reversals.
- There are many technical reasons due to timeout also your card transactions will be reversed automatically.
- Sometimes the merchant can reverse the transaction immediately or after some time.
- Sometimes issuer generates reversal transactions due to some technical glitch.
Transaction #5: Refund
Refund transactions also called return transactions.
When you return a product you already purchased, then that amount will be refunded at a certain time.
These kinds of transactions you can find in the monthly card statement.