> ## Documentation Index
> Fetch the complete documentation index at: https://doc2.payloco.com/llms.txt
> Use this file to discover all available pages before exploring further.

# Transaction Lifecycle

> When you use an Payloco issued card to make a purchase, an authorization request is initiated by the merchant which reaches Payloco via the card scheme i.e., Visa. Payloco performs a number of checks to ensure that the authorization is genuine and meets any authorization controls you have previously set up.

## There are two types of authorization scenarios:

* **Dual message (DM)**: In this scenario, the merchant’s bank initiates an authorization request to the issuer to reserve funds for later clearing. The reserved funds will be shown in your reserve balance. The funds are only deducted when the merchant sends the clearing request. If the clearing request is not initiated in a timely manner, the transaction is reversed and the funds are released back to you..
* **Single message (SM)**:  The authorization and clearing requests are effectively combined into one final message and the requested amount will be deducted from your balance straight away.

## Transaction types

The following transaction types are supported on your issued cards.
table

| Transaction Type         | Description                                                                                                                                                                                                      |
| :----------------------- | :--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |
| **AUTHORIZATION**        | An authorization request is sent to the issuer to determine the validity of the card for making a payment. This request can either be approved or declined.                                                      |
| **CLEARING**             | A clearing request is sent to the issuer to complete the settlement of a previously approved authorization request. The clearing request can be sent to settle: - a partial amount of previously approved amount |
| **REVERSAL**             | A request to capture funds that were previously authorized. This is done when the merchant wants to finalize the transaction and deduct the funds from your account.                                             |
| **CAPTURE\_REVERSAL**    | A request to reverse a capture that was previously made. This is typically done when a transaction is cancelled after the funds have been captured.                                                              |
| **REFUND**               | A request to refund a previously completed transaction. This is done when a merchant needs to return funds to you for a transaction that has already been settled.                                               |
| **REFUND\_REVERSAL**     | A request to reverse a refund that was previously made. This is typically done when a refund is cancelled or needs to be adjusted.                                                                               |
| **SETTLEMENT**           | A request to settle a transaction that has been previously authorized or captured. This is done to finalize the transaction and ensure that the funds are transferred to the merchant.                           |
| **SETTLEMENT\_REVERSAL** | A request to reverse a settlement that was previously made. This is typically done when a settlement is cancelled or needs to be adjusted.                                                                       |
| **CHARGEBACK**           | A request to dispute a transaction and initiate a chargeback process. This is done when you believe a transaction was unauthorized or incorrect.                                                                 |
| **CHARGEBACK\_REVERSAL** | A request to reverse a chargeback that was previously initiated. This is typically done when a chargeback is resolved in favor of the merchant or when the dispute is settled.                                   |