Betalingsservice payment rejections and reversals
Betalingsservice offers 2 options of challenging a payment.
The first can be actioned by the customer’s bank, up to two working days after the charge date and is known as a reversal.
A customer is able to reject or reverse a payment anytime within the first seven days of the month in which the payment is charged or due to be charged; this will be classed as either a rejection or reversal.
A rejection refers to instances where the payment has not yet been charged, whereas a reversal will occur when a payment has already been collected.
Payment rejections will be marked as failed in your GoCardless dashboard, whereas a payment reversal will be marked as a chargeback.
- Bank reversals
- Customer rejections and reversals
Bank reversals
Bank reversals can happen for the following reasons:
- There are insufficient funds in the customer’s account (and the payment was over 1000 DKK)
- The customer does not have a debtor agreement in place with their bank
- The bank or customer cancelled the authorisation before the payment charge date.
- The customer no longer holds a bank account with the bank
- There are errors in the payment data.
How the bank makes a reversal:
The bank sends a reversal request to Mastercard Payment Services, who will facilitate the transfer of funds from the merchant’s account to the customer’s account.
Reversal time limit:
Up to 2 working days after the charge date.
Please note: If a payment fails due to insufficient funds but the value of the payment is below 1000 DKK, the bank will absorb the cost and the merchant would not be required to return the funds.
Customer rejections and reversals
How a customer can make initiate a rejection or reversal:
A customer is able to initiate the rejection or reversal process via their mobile banking app or via their online banking. The customer will see an option to reverse or reject the payment, which will disappear after the 7 day window.
In addition to the above, the customer can initiate the process in person by going to a bank branch.
How the rejection/reversal is processed
A customer is only able to reject or reverse the full amount of a single payment and the cancellation of a single payment will not affect any future payments. The customer will notice the refunded amount as credit in the following month’s payment summary, however it may be shown against the original charge date.
A merchant is unable to directly dispute a rejection/reversal initiated in this way. Any funds that need to be refunded are processed automatically by Mastercard Payment Services, who will send a request to the merchant’s bank and the merchant will be notified of the rejection/reversal via the 0602 file from Mastercard Payment Services.
However, if the customer has unfairly rejected or reversed the payment, the merchant can re-charge the customer in the following month. If the customer rejects or reverses this second attempt then the merchant must ask the customer to pay via an alternative method (e.g. via an invoice).
Rejection / Reversal time limit:
A customer has until the seventh calendar day of the month in which the payment is due, to reject or reverse a single payment (that is going to be collected that month).
If the 7th falls on a weekend or public holiday, the customer will be given an additional banking day by which to initiate the rejection or reversal.
After the 7 day window the customer will need to initiate a customer claim.
The difference between a reversal and rejection
Reversal: If the payment has already been collected by the time the rejection or reversal is initiated, the funds will automatically be extracted from the merchant’s account and be returned to the customer.
Rejection: If the payment has not been collected yet, it will be cancelled before any funds move between accounts.