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Card Processing: Approve or Deny Every Transaction in Real-time

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Carla McMorris
November 24, 2020

Two of the more powerful products in card processing today are Transaction Decisioning and Instant Authorization. Sometimes called Just in Time Funding™, they empower companies to allow or deny card transactions based on preset conditions in real-time. This means that as a customer swipes your card at a merchant or online, your company can dynamically approve or deny the transaction based on your card program conditions.

In this blog we will explain how it works and highlight how companies are using it to benefit their customers.

Why Build It?

The infrastructure of Transaction Decisioning and Instant Authorization gives companies control over their card program’s transactions, but they also have the power to create new programs and products as well, for example:

  • Set-up a "closed-loop" card program limited to certain merchant brands (MCC Codes). 
  • Omit certain types of transactions, like gambling or alcohol.
  • Set up card processing funding rules, for example, to only fund dining transactions or travel transactions.
  • Dynamically fund transactions associated with pre-tax benefits (e.g., commuter benefits accounts).
  • Fund transactions if the user holds an account, such as a brokerage account.

Synapse Customer Example: Finch

Finch is a new, all-in-one account that gives you the benefits of investing with the flexibility of a checking account. Finch puts your money to work by automatically investing it in a portfolio of exchange-traded funds that match your unique risk profile. With Finch, your entire balance is always working for you and invested.

Finch uses Synapse’s Instant Authorization functionality to check users' invested balances and provide real-time payment decisions for card and bank transfer payments. Allowing them to push the envelope by giving users instant access to their money when they need it, even the invested portion.

Under the Hood

Synapse will send you a webhook when users attempt card transactions at a merchant or ATM if they are subscribed to the TRANS|POST|JIT webhook (see more here). Like responding to an API, your platform will digest the transaction objects that are supplied so you can then process a response with your platform's custom transaction logic. After Synapse sends out this webhook, we will wait 5 seconds to hear a response. Your platform should then target to respond to the webhook within 1.00s, with your decision to either allow or deny, or partially fund the transaction. The system will decline the transaction if no response is heard back to the webhook.

Synapse’s Transaction Decisioning and Instant Authorization gives your platform control over the funding mechanisms of each transaction. A transaction can be decisioned with Instant Authorization and also funded by up to 3 different accounts, including the customer’s account linked to their card. The relevant accounts and their funding amounts only need to be supplied in the response to the TRANS|POST|JIT webhook to unlock this card processing possibility. 

What’s Next

In the coming months we plan to add new webhooks and new functionality that will reimagine how funds move in and out of the system by allowing for:

  • Instant Authorization for ACH 
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