What is a Void Transaction?

A void transaction is the process through which a payment is cancelled before it is settled by the bank.  

Because it takes place early in the payment process, no funds are moved from the customer’s account.  

This particular process is separate from a refund, which happens after the payment is settled and funds arrive in the merchant’s account.

A void is utilized to correct errors once a transaction has been made.  A number of such errors include:  

• charging incorrect amounts  
• duplicated transactions  
• orders that have cancelled immediately after checkout.  

A void can take place before settlement, so it is important to act quickly before the purchase is considered a completed transaction. 

Payment refund and payment voiding are two different concepts, and here is how they differ:  

• Void: takes place before settlement; during this process, no funds are moved  
• Terugbetaling: happens after settlement; the amount is sent back to the customer.  

Void processing time may be reduced, and standard processing fees generally apply.  Refunds, on the other hand, require more time to be completed. 

When done incorrectly, voiding can have various repercussions:  

• customers can be left with unresolved payment holds  
• accounting mismatches can happen if a sale that was thought to be settled is, in fact, cancelled. 
• repeated errors can lead to chargebacks. 

From an accounting standpoint, a void transaction is perceived as a sale that never took place.  Therefore, it does not count as revenue.  

Still, it needs to be adequately logged for audit en reconciliation purposes.  

Treating void transactions and refunds as separate items may aid SaaS businesses in maintaining transparency and identifying potentially anomalous buying behaviours, which could impact the clarity of financial statements.

Here are some methods you can use to reduce the need for voids:  

• Inform customers of the total amount  and taxes before the final charge 
• Use delayed or manual capture so online betalingen can be adjusted before settlement 
• Apply fraud and error checks before capturing funds 
• Bied checkout confirmations to customers 

Een Merchant of Record platform centralizes these controls, which relate to the handling of timing rules, operational errors, and even refund management.