What is a Refund?
- A refund is a reversal of a payment fund back to your customer.
How can I initiate a refund?
- You can simply initiate a refund through your PayHere account.
- Go to 'Payments' tab in your PayHere account
- Search for the payment that you need to refund
- Click the particular payment to expand the payment details
- Click the 'Request Refund' button
What are the types of refunds processed by PayHere?
1. Instant Refunds
- When you refund a payment before it's paid out to your bank account (within 2 days), it's processed as an Instant Refund.
- An Instant Refund immediately gets refunded back to your customer as a Void in real-time.
2. Delayed Refunds
- When you refund a payment after it's paid out to your bank account (after 2 days), it's processed as a Delayed Refund.
- A Delayed Refund can take up to 5-10 days to get refunded back to your customer.
How long does a Refund take to get reflected on a customer's card?
It depends on the refund type.
- An Instant Refund is processed in real-time & is reflected in customer's card immediately as a Payment Void.
- Since the payment has not been paid out to your bank account yet, you won't see the payment or the refund in your payouts.
A delayed refund can take 5-10 days or even longer than that to get reflected in the customer's card as a Refund. Since a Delayed Refund is processed when the payment has already been paid out to your bank account, it goes through the following process which is time consuming.
- When you initiate a refund during the day, PayHere waits until the day-end batch process to recover the funds from your bank account balance or future payouts.
- At the day-end, if your bank account balance or the due payout has sufficient funds to facilitate the refund, it gets recovered & PayHere processes the refund. Otherwise, it retries at every day-end to recover the funds & the refund will not be processed until the funds get recovered from you.
- Once the refund is processed by PayHere, it will take 5 to 10 days from then to be reflected in the customer's card.
Since the payment you refunded has already been paid out to your bank account previously as a payout, you will see the refund also in payouts on the date the refund is processed by PayHere.
Why a Delayed Refund takes so much time to be reflected in the customer's card?
- Similar to an Online payment taking 2 days to get settled to your bank account after getting charged from your customer due to fund transfer cycles from bank to bank via card networks such as Visa & Mastercard, Refunds also move in a similar path, but in reverse.
- Even though the Payment-settlement path takes only 2 bank days as that path is mostly automated by all the banks using technical systems, the refund-settlement path is still processed manually by most of the banks through human involvement.
- Therefore it definitely takes more than 2 days for the refund-settlement due to the time consuming manual processes.
Why refunds took so much time during COVID-19 Lockdown?
- As explained above, unlike the payment-settlement process, refund-settlement process involves manual processes handled by humans (bank officers).
- Since the banks were closed for more than a month due to the COVID-19 lockdown, those manual processes were stopped & got queued due to the lack of human involvement.
- This caused a huge delay in processing refunds by involving banks (Merchant's bank & Customer's bank) which PayHere had no control in. Fortunately, all those queues are now cleared & refunds are being processed in the usual timeframe.
What are the payment statuses I see after initiating a refund?
- Waiting funds - PayHere is waiting until the funds get recovered from your bank account balance or future payouts to facilitate the refund
- Refund processing - PayHere has recovered the funds & the refund is being processed
- Refund processed - PayHere has processed the refund & it will reach customer's card within 5-10 days
I initiated a refund few days ago, but it's still in "Waiting funds" status. Why?
- That means PayHere hasn't been able to recover the funds yet from your bank account balance or future payouts. In that case, please make sure that the funds are available in your bank account to facilitate the refund. It will be processed at the day-end, on the date you make funds available in your bank account.
Is there a fee for Refund processing?
- No. It's offered completely free of charge as a value-added-service for all service plans.
What happens to the payment processing fee charged by PayHere when making a refund?
- No need to worry. PayHere even refunds the payment processing fee back to the customer, so your customer will receive the full amount charged from them.
Does PayHere support partial refunds?
- No. PayHere supports only full refunds. If you need to do a partial refund, you will have to refund it manually to your customer.
Which payment methods support refunding via PayHere?
- Only the card payment methods can be technically refunded via PayHere.
- American Express
- Diners Club
- Following non-card payment methods cannot be refunded via PayHere.
How can I refund a non-card payment method?
- You will have to manually make a refund to your customer.
How can I make a manual refund to my customer?
- You can contact your customer & request the details of their bank account & do a bank transfer manually using your Online banking facility or as an offline bank transfer.