How Do Debit And Credit Card Payments Work, At TransferWise?

At Wise, we do our best to offer you as many different methods to pay for your payment, as we are able to. From ACH Direct Debit, to debit and credit card payments, we try to make sure each customer has the option they would feel most comfortable using, when setting up a transfer.

One of the most popular options we offer is debit and credit card payments. Their popularity is no surprise as cards provide the convenience of being very fast and easy to pay with and comfortable to use. With the rise of online transactions, when compared to high street spending in the UK, it is therefore quite important to be aware of the intricacies of the payment methods available to you - which is why card payments are the main focus of this post today.

What are the key elements to a regular card payment?

The key elements to a successful card transaction are the following:

• The Cardholder - a.k.a. You;
• The Issuer - the bank or financial institution who has issued the (debit or credit) card to you. The Issuer is also the one who sends the funds to the Acquirer;
• The Merchant - the person, company or website that sells the merchandise you would like to pay for;
• The Acquirer - a bank or a financial institution which acquires the funds from the cardholder and passes them on to the merchant. Some banks are both Issuers and Acquirers and can fulfil both roles at the same time;
• The Card Scheme - a payment network which provides an opportunity for banks to either issue or acquire debit or credit cards. The most known card schemes are Visa and Mastercard.

How does a card payment work vs how does a card payment at Wise work?

With a regular card payment, you, as the cardholder, would purchase the goods or services that you wish and pay with the card issued to you by your bank, a.k.a the Issuer. Your payment would then need to be authenticated and the information about your purchase will be sent to the merchant’s bank, a.k.a. the Acquirer. After some secure communication between your bank and the merchant’s bank, the transaction would then be fully authorised and the money from your purchase sent to the merchant’s account. The transaction is then considered to be completed, and you’ve now successfully paid for your purchase.

Within Wise, this process varies slightly. You as the cardholder set up a transfer to a recipient, and you enter all the details that are necessary to successfully complete your payment. You then choose to fund that transfer with your card. After you’ve completed all of the necessary steps in the transfer flow, you’ll be taken to the payment confirmation screen. This means that your bank has approved and completed the payment on their end. Your bank will then send Wise the money for the payment, as per your instructions. Once Wise has received the money from your bank, we proceed with converting it to the currency you’ve chosen, and sending it out to your recipient’s bank. Once the money has been sent out to your recipient, the transfer is considered to be complete.

In both cases, you wanted to purchase something from your recipient. However, you may have noticed that the process of both payments vary slightly - in the first one, your bank has direct contact with your recipient, and deposits the money to their bank account for the transaction; if you choose to send the money through Wise, your bank has contact with our bank as you’re sending the money to us first, so we are able to convert the money to the currency you want the recipient to receive. We then, in turn, will send it out to your recipient.

Not happy with your card payment - what to do?

Understandably, not every purchase is a satisfactory one. Therefore, it’s also important to know your options on how to act when you’ve found yourself in a situation like this.

Depending on what step your transfer is at, you may still be able to cancel it. We’ve tried to make understanding the status of your transfer as easy as possible - you can check it yourself on the Activity section of your account.

We’ve written an article for our Help Centre as well, where you can find out how exactly you can cancel your transfer, divided by transfer statuses.

Once you’ve been able to cancel your transfer, we will issue you a refund. Debit card refunds can take up to 10 working days to process, but are usually much faster. How long the actual wait time of your credit or debit card refund is, depends mostly on the way your bank processes the refund. This is also the reason why we aren't able to speed up this process from our end. However, you can always check with your bank to get a better estimation on when you can expect the funds to be credited back to your account.

There are also certain times you’re no longer able to cancel your transfer. This is usually at the stages where your money has been sent out or your transfer has been marked as complete. At that point, we have already sent out your funds to the recipient and as such, cannot undo this step. However, all is not lost and we recommend that you get in touch with your recipient directly and let them know that you want them to return the money to us. The recipient can then simply contact their bank and ask them to reject the funds back to Wise. If that is not an option for your recipient, they can also send us funds back via a local bank transfer in some cases. For this, you can send us a quick email, asking for the banking details for your recipient currency, we will check for you if that option is available, and if so, send you the correct banking details to pass on to your recipient. When they do so, and the money reaches us again, we’d be happy to refund the money back to you!

Of course, there are situations where contacting the recipient proves to be unfruitful. This is where it’s important to understand the difference between regular card payments and card payments you’ve made through Wise.

With regular card payments your money goes directly from your bank to the recipient’s bank, so when there's an issue you can turn to your bank and get the transaction reversed and the money back from the recipient. With card payments processed through Wise, your money doesn’t go directly from your bank to the recipient’s bank as it will go to Wise first. What essentially happens is that you make a card payment to us, and we then proceed with converting it and sending it out to the recipient. Therefore, if you dispute the payment to get it reversed, it will reverse the first payment, the one you made to us. This would create a situation where we would then need to reach out to either your bank or to you and try to resolve the issue. Unfortunately, as the recipients aren't generally our customers, we are not authorized to contact them regarding any issues related to your transfer. Thus, we would need to turn to you and discuss your transfers with you directly.

In order to avoid situations such as these from happening, we strongly suggest that you know your recipient, are confident in who you’re sending money to, and always double check if the recipient’s banking details are correct! If you’re unsure in any of these, it’s best to take some time to check this information before you set up your transfer order.

What will Wise do?

If you do feel that you’ve been treated unfairly by the recipient, we highly suggest that you still let us know what exactly happened. This will help us understand the situation and take certain internal measures to help prevent other customers from having a similar experience to yours, and to try and ensure that all of our customers have an even better experience transferring their money.