Void transaction

Void transaction is a transaction canceled by a merchant or vendor before it is fully processed through a consumer's debit or credit card account. Although the voided transaction does not appear on the customer's account statement, it may be visible as a pending transaction when the customer checks their account online.

When a transaction occurs, the merchant swipes the customer's debit or credit card, and the terminal authorizes the transaction if sufficient funds are available in the customer's account. However, the transaction has not yet been settled, as the payment must be released from the customer's account to the merchant. If any issues arise with the transaction, it can be voided before settlement. Since the transaction is still pending and hasn't cleared the customer's account, the sale can be stopped from going through.

Voiding can also used to address fraudulent charges. Card issuing companies have fraud detection services that detect suspicious transactions, which are often placed on hold to ensure customer safety and security. The customer can verify the transaction's legitimacy with the company, leading to an immediate voiding of fraudulent transactions. In cases where the customer cannot be reached for verification, many card companies automatically void suspicious transactions before settlement.