This technology is designed to provide secure payments while purchasing services or products online. The first protocol was an idea suggested by VISA payment system, which was VDV – Verified by Visa. Later on, MasterCard created its protocol – MasterCard SecureCode (MCC) that would work the same way.
The online stores that use 3D Secure protocol can be easily recognized by the following logos placed on their web pages:
Authorization is a request to execute an operation using a bank card, resulting either permission or denial from the card issuing bank. The authorized amount becomes blocked on the customer's card while waiting for further actions: Withdrawal(Settle) or Return(Void).
If non of the operations (Settle or Void) have followed within a 30 day period, the amount unblocks automatically.
It is the operation that implies a withdrawal confirmation of earlier authorized funds from the customer's account in favor of the merchant.
It is the operation that implies a block cancellation of the earlier authorized funds on the customer's card.
Refund is the return of funds that have been earlier withdrawn from the customer's account as a payment for provided services or purchased merchandise. The refund is executed per customer's request and can be issued partially (less shipping fee, for example).
After the refund is completed, the funds are usually returned to the customer's account within a week.
In case the merchant is refusing to issue a refund, the customer's can still return the funds through a Chargeback, i.e. cancel the charge with the bank.
Chargeback is the process where the card issuing bank cancels the card operation, made by the the customer in an online store.
The procedure is initiated by the card holder. He submits the respective request to the bank where explains the reason why he considers the operation to be invalid or fraudulent.
The credit card company, in its turn, executes its own investigation and in case the customer is right, withdraws from the merchant's account the disputed amount and returns it to the customer's account, thus the chargeback made at the expenses of the merchant, who also pays the chargeback fee in order to cover the funds return procedure.
Chargeback can be initiated due to one of the following reasons: