What is a force-post transaction?
Majority of card-present and almost all card-not-present transactions require a merchant to obtain authorization from the issuer of the card being used to complete a transaction. This is to verify that the account tied to the card has sufficient funds to cover the cost of the transaction. A force-post transaction is the result of a merchant bypassing the authorization process by utilizing the code of a prior authorization. It is an industry standard that many Point of Sale (POS) systems and payment gateways support the functionality of what is called a “Force Sale”, sometimes referred to as an offline, or force capture transaction. Payments for recurring subscription services are often processed as force-post transactions due to prior authorization that cardholders have given to merchants.
How it works…
A transaction goes through a payment process that includes authorization, some form of backout, and ultimately a settlement. A merchant will swipe or enter payment information that is then submitted to the issuer of the payment method via the card networks for authorization. If the account balance is not sufficient, the authorization will decline. A Force Sale transaction is typically used by a merchant that has previously authorized a transaction and will hold on processing the settlement until after the services are provided, such as a hotelier who has booked a room for a customer for a future stay in their hotel. When the merchant has provided the goods or services and is owed payment, the merchant will process another authorization with the intent to fully process the transaction. If the card is declined due to insufficient funds, the merchant has the ability to manually enter the code of the previously successful authorization. Once the authorization code is manually entered, the transaction routes through the clearing and settlement process and is force-posted to the card issuer resulting in the cardholder’s account being overdrawn.
Issuer’s next steps…
If the cardholder’s account has been overdrawn, the issuer must work with the cardholder to rectify the negative balance. Issuers cannot block or reject force-post transactions, however, transactions that are not authorized often violate card network rules and can be charged back to the merchant through the Chargeback process.
What to do if the cardholder identifies a transaction that they did not authorize.
- Have the cardholder determine whether the transaction is being charged by a subscription service that the cardholder signed up for. If it is, they must contact the subscription service provider (e.g. Netflix, iTunes, Spotify, etc.) and cancel the authorization they provided to charge the card.
- Instruct the cardholder to contact our cardholder support team to dispute the transaction if they did not authorize the charge from the merchant.