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Cross-Border Payment Characteristics and Explanation for Bank Cards

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Written by Roogoo
Updated today

Cross-border payments differ significantly from domestic payments.

Unique Factors in Cross-Border Payments and Refunds:

Currency Conversion Processing

  • Foreign exchange conversion and exchange rate settlement required

  • Clearing between different currencies requires additional time

  • Exchange rates need to be determined on the settlement date

Cross-Border Payment Clearing

  • Involves international card organizations (Visa/Mastercard/American Express, etc.)

  • Must go through multiple stages including issuing banks, acquiring banks, international clearing networks, etc.

  • Cross-timezone processing leads to extended timelines

Foreign Exchange Controls and Compliance Review

  • Must comply with foreign exchange management regulations of both countries

  • May involve anti-money laundering (AML) and anti-fraud checks

  • Large transactions may require additional審核 (review)

Longer Settlement Cycles

  • International credit card transactions typically require 3-7 business days

  • In some cases may take 10-15 business days

  • Holidays will further extend processing time, potentially reaching 21 business days

Technical Processing Stages:

Pre-authorization to Deduction

  • First, pre-authorization freezes funds

  • Actual deduction occurs only after merchant confirmation

  • "Settlement in progress" status displays between these two stages

Merchant Account Processing

  • Acquiring institution needs to settle with merchant

  • May process in batches (daily/weekly)

  • Funds arrive in account only after deducting handling fees

Risk Control:

Fraud Detection

  • Cross-border transactions carry higher risk, requiring stricter risk controls

  • Unusual transaction patterns trigger manual review

  • First-time purchases at certain merchants may require additional verification

Dispute Period Protection

  • Time reserved for handling potential refunds or disputes (Chargeback)

  • Provides cardholders with a certain appeal period

Purchase Order Processing Recommendations:

  • Normal situation: 3-7 business days is a reasonable timeframe

  • Exceeding 10 business days: Recommend contacting issuing bank or merchant customer service for inquiry

  • Check statement: Review credit card statement to see if transaction has been posted

  • Keep records: Save transaction confirmation emails and order information

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