Basic Functionality

Payment information (card number, expiration date, transaction amount, billing address) is passed to the payment gateway. Innovate's PayCentral's payment processing service, obtains an authorization or decline response from the cardholder's issuing bank. The transaction amount reduces the available limit on the cardholder's credit line but the account does not yet incur any charges.

Real-time authorization is required. Batching of transactions for authorization is not permitted.

Upon fulfillment of an order (e.g., goods are packed and shipped), the merchant agency captures the payment authorization as a "sale" that has to be submitted for same day settlement processing.

An authorization and capture transaction is used when the fulfillment of an order happens at the point of sale; or virtually occurs within the same period as or within 24-hours of the order and payment authorization transaction. Examples: system-triggered fulfillment such as purchased documents delivered by e-mail, renewal certificates generated overnight and sent by mail the next day, face-to-face purchase transactions, etc.

Fulfillment of an order must be made within 7 days of the payment authorization. If not, the merchant must request another authorization.

Settlement is the process of pulling all the day's captured and returned transactions into a batch file and transmitting the file to the payment processor. This initiates a funding request to the processor and triggers the movement of monies from the cardholder's issuing bank into the agency's bank account. For "return" transactions, the refund amount is credited back to the cardholder's account during this process.

Depending on the solution, settlement may be triggered by volume of transactions or time of day, either manually or automatically, once or multiple times a day; however, batch settlement transmissions must occur at least once a day whenever payment transactions are accepted.

Batch settlement transmissions must be triggered before the 5:00 PM cut-off time in order for funding to occur timely.

J P Morgan Chase will provide reversals. This is done after authorization and before "capture" to remove or reduce the encumbrance from the cardholder's credit line.

Voids are used if the payment transaction is to be canceled before the daily batch settlement occurs. Voids may be done within the same day of payment only. Voids must be done for the full payment amount.

Refunds or Returns are used if the payment transaction has been processed in a batch settlement transmission. Often used when the customer returns a purchased good, or if a duplicate charge has occurred. Refunds/Returns may be done for the full or partial amount of the sale.

Returns/Refunds may be done for payment transactions 30 days old or less. Merchant agency must develop a policy for handling refunds for payments that are more than 30 days.

Processor rules are described in participating card processors contracts (American Express, Discover, VISA/MasterCard).

Daily batch settlement reports with transaction details and daily funding reports will become available to the state agency at agreed upon times between the state agency and designated financial institutions.
The state agency business operations unit compares settlement reports from the LPGW with batch and transaction details from agency application and/or e-Mall application and investigates discrepancies.
The state agency business operations unit follows internal agency procedures to provide funds/revenue to their state agency's fiscal office for reconciliation and settlement purposes.

The state agency's fiscal office collects funding reports form all the agency's merchant applications and uses the processing financial institution reports to verify the reported funds have been deposited and to reconcile settled discrepancies.
Using current internal agency procedures, the state agency fiscal office reports daily financial details to the state agency's accounting system/authorities.

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