Debt Repayment

New to TabaPay? Start Here

1. Learn

If you are just learning about TabaPay you can begin at Getting Started, and About TabaPay.

2. Chat

To make your first API call, you will first need access to Sandbox. Talk to sales to discuss your use case or get help at [email protected].

3. Test

Once you have access to sandbox from TabaPay Support, look at some code samples with recipes or feel free to post your questions in the developer forum.

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Payload Should Be Compact

Each API request body should be formatted in compact JSON when sending a request to the TabaPay API.

Note: If you don’t have access to Sandbox, please reach out to [email protected] .

What is Debt Repayment?

Debt Repayment is a general use case and payment acceptance process to return borrowed funds from the borrower to the lender. In short, they are transactions that are used to pay off debt. For example, a payer can make a payment to pay off the balance of their credit card, or funds sent to them as credit.

Debt Repayment Merchant or Lender

Debt Repayment Merchants and Lenders are one in the same that have either:

  • Loaned money to a consumer for the purpose of purchasing; e.g. vehicle, residence, college education; or
  • Issued a credit card to a consumer with the option to carry a balance.
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How do you participate in Debt Repayment

Interested in offering Debt Repayment to your customers? Contact us: email [email protected] to get started.

Eligibility

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Only debit and prepaid products may be accepted for debt repayment transactions.

Debt repayment is limited to merchant types with one of the following categories:

  • Financial Institution: Financial institutions Merchandise, services, and debt repayment
  • Non Financial Institution: Foreign currency, money orders (not wire transfer), stored value card/load, travelers cheques, and debt repayment

Use Cases

  • Auto Loans: Set up recurring or one-time payments for customers to repay their auto loans using their bank account or card.
  • Credit Card Loans: Allow customers to pay off credit card balances or loan amounts linked to credit cards. Provide flexible payment options for scheduled or manual repayments, helping customers reduce interest and maintain good standing with card issuers.
  • Personal Loans: Facilitate repayment of personal loans with options to use bank accounts or card.
  • Student Loans: Support customers in repaying student loans with automated payment plans or manual payment options.
  • Mortgage Payments: Simplify mortgage repayments with scheduled pull transactions from bank accounts.
  • Facilitate Third Party Lending: Facilitate funding or enable financing for customers purchasing goods or services through a third-party lender.
Out-of-Scope Cases
  • Debt that is past statute of limitations and is no longer collectible in a lawsuit, unless the merchant lawfully obtains cardholder’s written agreement to repay the debt in a specified amount.
  • Lease payments, where the payer does not automatically obtain ownership at the end of the payment.
  • Installment payments (not considered paying off pre-existing debt)
  • Delayed payment for goods or services based on terms agreed upon between the cardholder and the seller.

Why Debt Repayment?

  • Faster Funding: Use card payments to receive guaranteed payments within in 24–48 hours, vs. five days for checks processing.
  • Lower Costs: Reduce operational overhead and eliminate returned checks.
  • Customer Preference: Consumer borrowers increasingly prefer debit card payments over checks, or ACH.
  • Operational Efficiency: Reduce late payments and improve cash flow with automated recurring transactions.
  • Guaranteed Funds: Reduce risk of NSF compared to checks.
  • Improved Cash Flow: Payments are processed and available quickly, even for large amounts.

Debt Repayment API Flow

The following diagram represents a Debt Repayment CIT transaction.

  1. The borrower initiates a repayment of $100—customer response and inputs payment info.
  2. You send the Create Transaction request with type:pull.
  3. TabaPay sends the request to the networks.
  4. Networks return the request with a success or error.
  5. TabaPay returns the API response to you.
  6. You display the relevant confirmation(s) to the customer and borrower.

Integration

The following section provides integration details for implementing your use case.

Feature Enablement at TabaPay

  • TabaPay clients who wish to integrate with debt repayment must work with their TabaPay representative to enable the feature.
  • Please request Partial Authorizations as a Debt Repayment Client.
  • No enablement is required for cardholder-initiated vs merchant-initiated transactions.

Payment Features to Consider

Payment Feature

Description

Recommendation

CIT

MIT

Merchant Initiated Transaction Framework

Charge your customer’s card without their active participation. A transaction is first made with the cardholder actively present, or a cardholder payment agreement to store a credential-on-file and use it for subscriptions, or ongoing payments.

Required for recurring transactions

Partial Authorization Service

Provide an alternative to declining a transaction when the card’s available balance is not sufficient to approve a transaction in full. Participating issuers return a response with an approval for a portion of the original amount requested, enabling the remainder of the transaction amount to be paid by other payment methods. Increase sales and decrease declines by enabling customers to use all available prepaid or debit card funds, supplementing with an alternate payment method for a seamless purchase experience.

3D Secure

Use 3DS messaging protocol to authenticate a customer's card information when processing card-not-present (CNP) e-commerce, or mobile purchases, and payments. Help prevent fraud and provide an additional layer of security for CNP credit card and debit card transactions. This service is provided by all four major card networks.


Account Name Inquiry

Fight growing account takeover fraud, and authorized push payment scams. Address market demand, and increasing concern from governments and regulators by enabling a cardholder's name to be checked against the name held by their Issuing bank.


Address Verification

Reduce fraud and chargebacks by verifying if the card issuer recognizes the address provided by a cardholder. Helps you determine whether to accept or decline a particular transaction or take further action.

CVV2 Verification

Help verify if the cardholder has possession of the physical card. While it is not effective against lost or stolen card fraud (See ANI or AVS), it is an additional check beneficial in e-Commerce channels since the Card security code is only printed on a physical card and is not available anywhere else.


Apple Pay and Google Pay Tokens

Give customers more freedom to pay by enabling two of the most popular digital payment tokens.




TabaPay Account Updater

Keeps cards on file current by automatically updating payment credentials (e.g., new expiry dates or reissued cards) with the card networks. This reduces customer friction, prevents declines in recurring and merchant-initiated transactions (MIT), and removes the need for customers to manually update their stored card details.



TabaPay Tokens

TabaPay stores and manages payment cards and bank accounts securely for you. Offload the complexities of storing these payment instruments safely and securely, while you focus on your core value proposition. For every payment card or bank account, TabaPay validates the incoming payment instrument and stores them as an Account ID. This Account ID is what is provided back to you, so you do not have to manage the 16-digit payment card number or bank account. Use accountIDs with the (Create Transaction request for push and pull payments.



Cardholder-Initiated Transaction (CIT) vs Merchant-Initiated Transaction (MIT)

TermDefinition
Cardholder-Initiated Transaction (CIT)Any transaction where the cardholder is actively participating in the transaction. This is often the first transaction the cardholder comp. It is also each time you have a cardholder interaction, say to update the card or details on file.
Merchant-Initiated Transaction (MIT)Relates to a previous cardholder-initiated transaction or a cardholder payment agreement for future payments but is conducted following a CIT without the active participation of the cardholder. As a result, the merchant cannot perform any cardholder validation or authentication. In all cases, an MIT should provide a link to the cardholder’s original interaction. Often times, these are 'subsequent transactions' that happen after the 1st CIT.

Your use case may often includes a CIT followed by an MIT. In the life of a payment workflow, there can be many CITs depending on how often cardholders update their card information with you.

Implementation Checklist

This checklist serves as a guideline for TabaPay clients interested in implementing this feature and includes, but not limited to, the following:

  • Feature enablement of your use case.
  • Distinction between Cardholder-Initiated and Merchant-Initiated Transaction
  • Cardholder experience & design between CIT and MIT
  • Sandbox integration
  • Production integration

Cardholder-Initiated Transaction

Include the designated requirement for each listed feature.

  1. Customer Initiates Transaction: The TabaPay client’s customer presents their card for a transaction. They initiate a purchase of $100.

  2. Query Card: TabaPay Client performs Query Card and checks for:

    1. ANI: Add ?ANI+AVS as a query parameter in the Query Card endpoint.
    2. AVS: Add ?AVS as a query parameter in the Query Card endpoint.
    3. CVV: Include the 3-4 digit security code in the securityCode body parameter.
  3. Create Transaction Request: The TabaPay client submits a Create Transaction Request with the following indicators:

  4. Transaction Submission: TabaPay sends the transaction request to the card network (for e.g with the Partial Authorization indicator enabled)

  5. Card Network Processing: The card network verifies the transaction and forwards it to the card issuer.

  6. Issuer Evaluation: The issuer reviews the transaction and approves the available balance on the card. If the available balance is less than the purchase amount, the issuer returns an authorization response to the card network. This response includes a unique code and the approved partial amount.

  7. Network Communication: The card network notifies TabaPay of the partial approval amount.

  8. TabaPay Client Notification: TabaPay informs the client of the authorization response.

  9. Customer Communication: The TabaPay client identifies the partialAmount field in the response, calculates the difference between the approved partial amount and the total transaction amount, and communicates this information to the cardholder.

  10. Cardholder Options: The cardholder has three options:

    1. Provide an Additional Payment Method: Use split-tender functionality to cover the remaining balance.
    2. Cancel the Transaction: Opt not to proceed with the purchase.
    3. Accept the Partial Purchase: Agree to load only $75 into their app account.

Note: This process aims to ensure a smooth and satisfactory experience for the customer. If the customer decides not to complete the sale, the TabaPay client should initiate an authorization reversal for the partial amount.

Merchant-Initiated Transaction

A Merchant-Initiated Transaction (MIT) is based on an existing agreement between TabaPay client and the cardholder. Typically, this agreement is established when the cardholder completes an initial transaction on their own. During this process, the cardholder is provided with all relevant terms and conditions, along with any other necessary information.

Subsequently, TabaPay client can store the networkID from the Create Transaction Response. This identifier is used in future transactions to link merchant-initiated transactions with the original cardholder-initiated transaction, allowing the network and issuers to effectively associate the two.

Here’s a guided flow of Merchant-Initiated Transactions:

  1. Lender initiates an MIT repayment of $100 (paid by the customer).
  2. You send the Create Transaction request with type:pull and MIT indicators.
  3. TabaPay sends the request to the networks.
  4. Networks return the request with a success or error.
  5. TabaPay returns the API response to you.
  6. You display the relevant confirmation(s) to the customer and borrower.

MIT Indicators

  1. Execute Transaction on Scheduled Day: On the day of the transaction, the TabaPay client should use the Create Transaction API only if the cardholder has not canceled the transaction. If explicit consent from the cardholder has not been received (whether through cancellation or lack of response), the TabaPay client shall refrain from processing the transaction.
  2. Specify Merchant Initiated Transaction: For guidance on integrating Merchant-Initiated Transactions, consult the Visa MIT recipe and MasterCard MIT recipe. It will be important for TabaPay clients to include the networkID field of the original cardholder-initiated transaction.
    1. MITuses the recurring field, and the recurringData array.
      1. See the full list of values on CIT MIT Indicators.
      2. See the full example body parameters within each Recipe.

Including Partial Authorization

  1. Set Partial Authorization Flag: Set the partial field in pullOptions to true to indicate that partial authorization is requested.
...   
"pullOptions": {
        "recurringData": {
            "initial": true,
            "initiator": "C",
            "type": "R"
        },
        "partial": true
    },
    "ref
...

Note: For a full request, refer to Partial Auth Pull Transaction.

  1. Handle Create Transaction Response: If the Create Transaction API response includes the partialAmount field, and PARTIAL_COMPLETED status, it indicates that the transaction was partially authorized.
{
  "SC": 200,
  "EC": "0",
  "transactionID": "TabaPay_TransactionID_",
  "network": "Visa",
  "networkID": "123454646545645",
  "networkRC": "00",
  "partialAmount": "0.01",
  "status": "PARTIAL_COMPLETED",
  "approvalCode": "000000"
}

Provide Receipt and Cancellation Confirmation:

  1. Send a Receipt: Follow up with a receipt of the transaction, including details of any additional payment methods used for the remaining balance.
  2. Confirm Cancellation: If the transaction is canceled, provide a confirmation of the cancellation to the cardholder.
Best Pratices for Debt Repayment
  • Initial Transaction with Cardholder Present: Conduct the initial transaction with the cardholder present (Cardholder-Initiated Transaction, CIT) so that they can review and agree to all terms and conditions.
  • Store and Relay NetworkID: Record the networkID from the initial transaction and use it in the networkID field in pullOptions.recurringData for all subsequent merchant-initiated transactions.
  • Advance Notification: Notify cardholders well in advance about upcoming transactions, including details about potential partial authorizations. Use methods such as email, SMS, or in-app notifications
  • Internal Staff Training: Train support staff to handle issues related to partial authorizations, including the process for reversing them. Be prepared to void or reverse partial authorizations if needed.
  • Review MIT Guidelines: For additional details on merchant-initiated transactions, refer to the guidelines available at: Merchant-Initiated Transactions Overview.

Debt Repayment Compliance

Transaction Resubmission Requirements

A debt repayment transaction that receives a decline response may not be resubmitted for authorization if any of the following is true:

  • The transaction has already been submitted three times, with each retry resulting in a decline response.
  • After more than 14 calendar days from the date of the original decline response.
  • The decline response code was one of the following
    • 04 – Pick-up card
    • 14 – Invalid account number (no such number)
    • 41 – Pick-up card (lost card)
    • 43 – Pick-up card (stolen card)
    • 52 – No checking account
    • 57 – Transaction not permitted to cardholder
    • 75 – Allowable number of PIN-entry tries exceeded
    • 78 – Blocked, first used
    • 82 – Negative Online CAM, dCVV, iCVV, or CVV results

Do not deposit the transaction after a decline response that has met one of the previous conditions—regardless of whether an approval response is received.

Transaction Receipt Requirements

A transaction receipt for debt repayment must contain the type of repayment—for example, loan, mortgage, credit card, goods, or services.

Customer Service and Training Requirements

Determine what kind of training is required for customer-support staff. Staff training is helpful to ensure adherence to acceptance options- for example, setting up recurring payments.

Recipes

Here are some recipes/code snippets to get you started.

More Resources