Citation :

Shubham Jindal, "Introduction to Digital Payments in the United States of America," International Journal of P2P Network Trends and Technology (IJPTT), vol. 15, no. 2, pp. 1-10, 2025. Crossref, https://doi.org/10.14445/22492615/IJPTT-V15I2P401

Abstract

Digital Payments in the USA are revolutionizing, and to be ahead in the growing sector, it is essential to understand how digital payments in the USA work, which is significantly different from how some other countries, like India, process payments. At the core of USA digital payments is the Authorization and Capture, which is not followed in countries like India. This article will summarize core digital payment concepts and provide an overview of how digital payments work in the USA. We will review Payin, Payout, Refund, Authorization Reversal, Void, Chargebacks, and Reversal Adjustments. The article will then explain payment flows in offline and online environments. It will then introduce advancements in online payments, which use merchant-initiated captures along with partial voids, partial Capture, and partial refunds. This article will focus only on credit and debit card transactions. In the future, the article will discuss 1) wallet-based transactions such as Apple Pay, Google Pay, Venmo Card, 2) Account-to-Account transfers or p2p transfers such as Zelle, Venmo Wallet, 3) Settlement, Payout, Chargebacks & Reconciliation in more detail. 

Keywords

Digital Payments, Authorization, Capture, Void, Refund, Chargebacks. 

References

[1] Payment Service Providers Explanation, WikiPedia. [Online]. Available: https://en.wikipedia.org/wiki/Payment_service_provider
[2] Payment Service Providers Explanation, Stripe, 2024. [Online]. Available: https://stripe.com/resources/more/payment-service-providers
[3] Susanne Grohé, Technical Service Providers, PayTechLaw, 2017. [Online]. Available: https://paytechlaw.com/en/lets-distinguish technical-service-provider-or-payment-initiation-service/
[4] Acquiring Bank Explanation, WikiPedia. [Online]. Available: https://en.wikipedia.org/wiki/Acquiring_bank
[5] Acquiring Bank Explanation, Stripe, 2023. [Online]. Available: https://stripe.com/resources/more/acquirer-vs-issuer
[6] Issuing Bank Explanation, WikiPedia. [Online]. Available: https://en.wikipedia.org/wiki/Issuing_bank
[7] Issuing Bank Explanation, Stripe, 2023. [Online]. Available: https://stripe.com/resources/more/acquirer-vs-issuer
[8] Card Schemes, WikiPedia. [Online]. Available: https://en.wikipedia.org/wiki/Card_scheme
[9] Payment Reversal Stats, National Retail Federation, 2023. [Online]. Available: https://nrf.com/research/2023-consumer-returns-retail industry
[10] Adyen, Partial Manual Capture. [Online]. Available: https://docs.adyen.com/online-payments/capture/#partial-capture