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I am new with the payment process. I hope clarification would be appreciated.

I am developing a payment gateway. And I am trying to understand the way an authorization and capture of payment.

What will happened if all of these happened?

  • the customer authorize the payment with order.
  • the merchant capture the fund.
  • the ordered product/service is not delivered
  • the customer request for refund
  • the merchant ignore the customer and run away with the money captured.
3

Most likely the consumer files a dispute (often called a chargeback) with the credit card company. The company then sends the merchant a letter detailing the dispute, and the merchant has a chance to respond within some time period (maybe 30 days). If the merchant does not respond, the money is taken from the merchant and given back to the customer.

The merchant response should include proof of the purchase/customer authorization and that the product or service was delivered, but how much proof or what it entails may vary considerably.

Or the customer never files a dispute, and the merchant ignores them, and eventually the customer cannot file a dispute anymore and the merchant has gotten away with it.

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    I'm not sure that you can "cash out" immediately; funds might be held for some time, but I'm not certain on that. I would also think that you would have to give quite a bit of personal information to set this up (though I suppose it could be a stolen identity). – briantist May 28 '15 at 20:58
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    This dispute process is often called a chargeback (with credit cards) – Noah May 28 '15 at 21:07
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    Good point @Noah, added to the answer. – briantist May 28 '15 at 21:14
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    Do you really think the credit card companies haven't considered and guarded against that attack? (Rhetorical question. Of course they have. Good way to be hit with fraud charges.) – keshlam May 28 '15 at 22:15
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    @Yeo: You can also hide in a dark alley, hit someone on the head with a club, take their wallet, and flee the country. You may net some money this way. That doesn't mean it's legal, or that there are no consequences. If you make a fake business and steal people's money, they will come after you to recoup their losses. – BrenBarn May 29 '15 at 3:16

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