It is a structure developed by Visa for purchase refund transactions. The purchase return authorization message aims to improve the customer refund process by allowing cardholders to view their transactions in real time.
With Purchase Return Authorization, complaints that may arise regarding refund timelines will be reduced, refund times can be shortened, and cardholders will be able to see their refund processes within their card transactions through banking channels.
Is Purchase Return Authorization supported by all card schemes?
Currently, it is only supported by Visa in the United States and a few other countries. It has been announced that other card schemes will support it going forward.
How will purchase return authorization solve problems in refund processes?
In standard authorization transactions, both the card and the merchant are checked in real time. Therefore, the likelihood of these transactions being fraud is naturally low. However, refund transactions are not carried out online. This is where Purchase Return Authorization comes in. Before the refund is sent to the card, an online message is generated stating that the refund will be made, and this message is answered by the issuer. If the account is potentially fraudulent, or the account does not exist or is closed, the transaction is declined, reducing chargebacks. The cardholder will also be able to see in their card transactions that the refund is in process and that the refund process has been initiated by the merchant/POS bank. Enabling a pending purchase return in an online account statement improves the cardholder experience and reduces refund-related customer service inquiries.
