Cancellations & Refunds

At times, businesses may need to stop a payment before it is processed or return funds to the payer after a transaction has been completed. GrailPay provides two options to handle these situations: Cancelling a Transaction and Refunding a Transaction.

Cancelling a Transaction

A cancellation allows a transaction to be stopped before it is processed by our banking partners. This option is only available for a short period and can only be applied to transactions that are still in the CAPTURE_PENDING state.

How It Works:

When a transaction is cancelled, the ACH transfer is never initiated, meaning no funds leave the payer’s account.
Once the transaction moves out of the CAPTURE_PENDING state, it can no longer be cancelled.
If successfully cancelled, the transaction remains in a CANCELLED state indefinitely within our system.

Refunding a Transaction

A refund is used when funds have already been sent to the recipient, but need to be returned to the original payer. Unlike cancellations, refunds can be initiated at any time during the transaction lifecycle. However, the refund will not be processed until the original payment has been fully completed.

How It Works:

A refund request can be made at any time, but it is held until the transaction reaches the PAYOUT_COMPLETE state—which means the funds have already been sent to the recipient’s bank.
Once the original payment is settled, a new ACH transfer is initiated to withdraw the funds from the recipient’s account and return them to the payer.
This process follows standard ACH timelines, meaning it may take a few days for the refunded amount to reflect in the payer’s bank account.

Key Differences Between Cancellation and Refund

Feature	Cancellation	Refund
When It Can Be Initiated	Only while the transaction is in CAPTURE_PENDING	Anytime, even after completion
Effect on ACH Transfer	Stops ACH origination before funds move	Sends a new ACH transfer to reverse the payment
Processing Time	Immediate (if within CAPTURE_PENDING state)	Standard ACH processing time (a few days)
Final Transaction State	CANCELLED	PAYOUT_COMPLETE

Choosing The Right Option

If the transaction is still pending and you want to prevent it from being processed, cancellation is the best option.
If the transaction has already been completed, and the payer needs their money back, a refund is required.

By understanding the differences between cancellations and refunds, you can efficiently manage payment adjustments and ensure smooth financial operations.