

A reversal is the cancellation of a transaction before settlement is completed, preventing funds from being transferred to the merchant’s account.
Reversals usually happen due to technical failures, authentication issues, or immediate cancellations. Since settlement has not occurred, funds are released back to the customer quickly.
Unlike refunds, reversals occur before settlement and do not require a separate return process. This makes reversals faster and less complex
Understanding reversals helps businesses differentiate between failed transactions and completed payments. Accurate classification improves reconciliation and customer communication.