Reversal

There are a few instances where Merchants would want to reverse the transaction.

  1. Transaction was authorised but cannot be completed
  2. Transaction was completed but there was an error
  3. Acquirer/Merchant must release the hold on funds

Recall that in Day 3 we talked about MTI and one of the MTI is 0400/0410 which are the reversal codes.

  • 0400 is the request
  • 0410 is the response

If you think about the flow, using our analogy of buying Kaya toast from Yakun:

  • When you tap your card, the message being sent is 0100 (Transaction Request) and the response is 0110 (Transaction Response) → This is the Approved Transaction.
  • When they have accidentally charged you too much, they will call for a reversal of the transaction.
  • They will send 0400 (Reverse Request) and the POS should ideally receive a 0410 (Reverse Response).

In this particular request/response, it will send quite a few codes, but notably there are:

  • DE2: PAN Number (Permanent Account Number)
  • DE3: Processing Code
  • DE4: Transaction Amount
  • DE37: Retrieval Reference No (This is the transaction ID for the Approved Transaction)
  • DE39: Response Code
  • DE90: Original Data Elements

Issuer will then use DE37 to find the original authorisation & reverse it.

Note: Reversal Message is different from Advice Messages.

Advice

Advice Messages usually tell issuers (in this case DBS Bank) about a transaction that has already happened & does not require any authorisation. They usually refer to this message as informational messaging (meaning money does not flow).

Types of advice messages:

  • 0120 Authorisation Advice
  • 0121 Authorisation Advice Response
  • 0220 Financial Advice
  • 0221 Financial Advice Response
  • 0420 Reversal Advice
  • 0421 Reversal Advice Response

TLDR

  • Reversal is to undo a particular transaction.

    • It happens usually after authorisation but before settlement (clearing phase).
    • It requires approval from the banks.
    • Sends a 0400 and receives a 0410 message.

  • Advice is informational only.

    • It happens after the transaction completes.
    • It does not require approval.
    • Example flows: send 0120 and receive 0121, or send 0220 and receive 0221.

Hence, there is a big difference between the two. DO NOT confuse yourself with these.