POS Transaction types explained

Posted on 1st Apr 2024 598 views

Financial transactions

Purchase Transaction 

The Purchase Transaction is used for normal purchase of goods at a store with a POS device.

The POS terminal sends an Authorization Request Message request to the cardholder's bank. The Purchase can be CHIP based (contact) NFC based (contactless) or Magnetic stripe swipe. Credit or Debit cards can be used.

Merchandise Return

The Merchandise return transaction is used to return goods at a store with a POS devicem, and receive the money back to your account.

The POS terminal sends an Advice Request Message.

Cash Advance

The Cash Advance transaction is used to disburse cash at a store with POS, like an ATM withdrawal.

The POS terminal sends an Authorization Request Message to the to the cardholder's bank.

Reversal

The reversal transaction is used to undo the effects of a previous transaction. Only the last performed transaction can be undone.

The POS terminal sends a Reversal Advice Request Message to the to the cardholder's bank to undo the previous transaction. 

Pre-Authorization

The pre-authorization Transaction is used to verify that the card holder has sufficient funds for the purchase. Usually used for fuel dispensers, the pre-authorization places a specific amount on-hold on the customer account.

The POS terminal (of the petrol station) sends an Authorization Request Message to the to the cardholder's bank to place the pre-authorized amount on-hold. 

Pre-Authorization Completion or Adjustment

The pre-authorization Completion Transaction is used to complete a pre-authorized purchase. Usually for fuel dispensers, the completion or Adjustment transaction completes the purchase with the correct amount (how much fuel has been purchased) and debits the account accordingly

The POS terminal (of the petrol station) sends an Advice Request Message to the to the cardholder's bank to complete the purchase with the correct amount.

Adjustment

The Adjustment transaction, which can be used to complete a pre-authorization, can also be used to adjust the amount in a previous authorized transaction.

The POS terminal (of the petrol station) sends an Advice Request Message to the to the cardholder's bank to adjust the purchase with the correct amount.

Balance Inquiry

The Balance inquiry transaction can be used to check the account balance on a POS device, like an ATM.

Card Verification

Teh Card Verification transaction is used to check if a customer's card is valid and is accepted at the terminal or merchant.

Mail or Telephone Order

It is used when the cardholder places the order, or purchase, via telephone or e-mail, and the operator enters the transaction details in the POS.

Non-finalcial transaction - administrative

Logon - most common

The Logon transaction is used to connect the card terminal to the Terminal Host (Bank).

The POS device sends a Network Management Request Message to the Host. Th ehost validates the ID of the terminal, synchronizes data, validates the encryption keys for communication, validates POS operator ID and responds positively if the POS is allowed to operate.

Logoff 

Used to stop a previous session, if there was an issue, or if the operator is changed (another employee at the register)

Close Batch

Several close batch transactions are used to end a period of accumulation of counters. The Close batch can be used to close a period of processing for the device. It can close the day, the shift, or a processing batch

Subtotals 

Subtotals are used to calculate the counters and accumulation over periods of POS operation

Key exchange 

It is used to generate a new encryption key for communication, A specific Key Exchange protocol is followed.