Why do online payments get stuck and what can you do? 🤔

Hi, I am Tiara and I work in the Finance team at FamPay. I handle reconciliations which pretty much means I take care of your transactions if they get stuck.

Let me explain with an example:

You are excited about buying the much awaited Playstation and you finally use your FamCard for a big purchase and your online payment screen hangs. What do you do? What does FamPay do to help you?

By the end of this blog, you will learn the answer to both. Before we dive into this, let's go through the basics.

How does an online payment work?

An online payment involves the following 4 parties:

• 🤳 Consumer - who initiates the payment process (You!)
• 🧾 Payment Gateway - who connects our app to the banks for payment.
• 🏦 Issuing Bank - the bank from which money is debited.
• 🏦 Acquiring Bank - the bank into which money is credited.
  

When anyone makes an online payment, a lot of things are getting processed at the back end, and even if one thing goes wrong, the whole payment process may hang/fail.

This is extremely common for a business, but for a consumer such as you, who might be experiencing this for the first time, this may be upsetting and frustrating. More so for the users who are making payments of a larger sum.

Before I discuss how I take care of these payments at FamPay, it will be good to know the reasons why these payments may fail.

Bank server Downtime

A Downtime implies when the bank server is down. Here, the payments get initiated by you and then goes into "Payments processing" state for a long time.

These downtime timings can be planned or unplanned. On weekends or bank holidays, a bank server may be down and if you initiate a payment at that time, it may fail. On certain other days, there may be an unplanned downtime due to some error, because of which your payment may fail. Also this downtime could be from any bank’s end, either the Issuing Bank or the Acquiring Bank.

There could be many other reasons for payments failure, such as

• You entered the wrong OTP
• Internet connection failure
• Security concerns
• Transaction limit exceeded
• Transaction amount exceeded the prepaid account balance
• Risk detected by bank
• Blacklisted account

But the major concern I will discuss is Bank downtime, and how we resolve it at our end.

What happens when an online payment fails due to downtime?

Your payment can be stuck and it may show that the amount is debited at your end, but is not credited to your beneficiary’s account. This can happen in both UPI / Card payments.

When this happens, you may

• 😥May not be able to track your transaction
• 😭May get the status of your transaction as “Payment Processing”
• 😠May get annoyed!!

What you have to remember is

• DO NOT make another transaction to the same beneficiary for 48 hours.
• You CANNOT cancel a transaction whose status is “Payment Processing”.

Why?

Since your transaction is still processing, you will only get to know the status in 48 hours. After 48 hours (i.e. 2 working days), the payment can be:

• 🤩 processed (i.e. your beneficiary can receive the amount), or
• 🙅‍♂️ failed (i.e. your beneficiary won’t receive the amount).

What does FamPay do at this time?

• For us, your transaction will be in “Payment Processing” state which means even we don't know the final status of your transaction.
• We wait for the status in the back end for 1 working day. Sometimes, the transaction gets processed in 1 working day and gives the final status as “Processed” or  “Failed”
• If a transaction is in “Processing” state even after 1 working day, then I manually check with the banks and change it!! So I will need 1 more working day to fix this manually.
• Hence, you have to wait for 2 working days to get a status and before you make another payment to the same beneficiary.

Refund, In case the payment’s final status is “Failed”

• If the payment fails after 2 working days, not to worry. We will initiate a refund to your account.
• Please note the payment refund takes 5-7 working days after the status is updated to "failed".
• So cumulatively, it may take 9-10 days since the day you initiate the payment incase of “payment processing” ➡ “failed” state. But do not worry, as your money will be refunded and it's not going anywhere! 🤑

So, the next time you go to your nearby store to buy something urgently and your UPI payment goes into “Payment processing” state, don't worry. Just ask the shopkeeper to take a picture of the transaction, give them your phone number and also assure them that if the transaction fails after 2 days, they can call you and you will make a new transaction. Avoid making a second payment / trying to cancel the payment.