Failed Online Transaction: Where Did the Money Go?
Friend: I’m hungry, and I can’t wait. Let’s order food online.
Best Friend: Here, try this new app. I’ve been using it for a while, and it delivers soon.
As usual, word of mouth makes the customer place an order. But the transaction fails, and the hangry friend doesn’t keep calm, because the amount is debited, too.
And, with that glitch, the end of the line for any logical reasoning is drawn. This, of course, can be quite frustrating, considering that there is an immense amount of trust that goes into putting your bank details online to initiate a transaction.
Often, consumers and businesses assume that the payment gateway is at fault, and this can lead to them selecting other payment gateways to conduct their transactions.
What happens next?
Most likely, an unpleasant banter between ‘The Brand and The Customer’ in social media, public forums, blogs, bad reviews and whatever means available. The situation worsens when other unhappy parties, who share the common cause join the chatter.
The money is here
For instance, X amount is debited from your account, and for some reason, it doesn’t reach the destination account. Now the money remains in something called a suspense account, which is used to carry ambiguous or faulty entries and discrepancies pending their analysis and permanent classification.
At the end of the day or a specific time, every bank runs a record tally to hasten the refund process (Generally, the total available time for the reversal is 48 hours). Still, if the credit doesn’t show in the destination account, the amount gets credited to the source.
How does Razorpay handle payment failures?
At Razorpay, we have developed monitoring systems to track payment/refund. In a few cases where it doesn’t get tracked, we attempt to resolve the matter with banks via manual intervention.
We encourage our clients and businesses to receive the status of each payment through website integration and webhooks on their servers. When a transaction is marked as failed, we give these online businesses an option to check via our Webhooks API, to verify its authenticity.
The entire money movement in online payments is via escrow accounts, which are jointly monitored by payment gateways and acquiring banks, which means payment gateways cannot make earnings from the money they hold or move on behalf of their customers.
The road less taken
In the last five years, as one of the fastest-growing payment gateways in India, Razorpay has seen a subtle change in the dynamics of the payments ecosystem.
A young India has emerged, where the consumers are obsessed with one-click payment on merchant checkouts and prefer non-OTP based payment methods like UPI for completing a payment. This indicates the apparent restlessness of the new Indian consumer.
In this era, asking people to wait for a week for an amount processed in 5 seconds is not just unfair but a poignant question on the technological advancements being made in the fintech ecosystem.
If you ask us, a bad experience is the slayer of 100 positive reviews. If you have set a certain level of expectation, then you should be able to deliver, failing to do the same makes it clear that you don’t value your customer’s priorities. With Razorpay’s Instant Refund, you are giving more opportunities to the customer–a chance to place an order again.
Razorpay’s Instant Refunds tackles this lengthy and opaque life-cycle of refund. By using this feature as a merchant, you can now do away with sending the messages mentioned above and rest assured that the refunds shall hit the end customer’s account within 2 minutes of the initiation.
It means a world, to the customer, if he/she gets the refund immediately.
Now, Imagine, a troll ravaging negative reviews on your social media platform, and there goes your brave warrior with a sword of unmatched experience, countering the views and preaching the thought–a second chance. How does that sound?