Electronic and blockchain-based financial transaction mechanisms have introduced users to the possibility of remotely conducting payments and cash transfers without the need to physically come in contact with retailers and payment spots.
Bank cards, payment services like PayPal, and cryptocurrencies have made transactions quite practical due to the fact that users can simply facilitate a product payment through their smartphones, with their bank cards, or just send some digital currency with their crypto wallet if a retailer supports crypto payments.
However, users often have issues when they want to cancel payments. While you can instantly “cancel” in-person fiat payments if you change your mind and decide not to buy a certain product while waiting in line at the cash register – this isn’t how electronic payments work.
In this guide, we’re going to take a detailed look at how different transaction types work and how you can cancel pending transactions with bank cards, PayPal, crypto, and crypto payment gateways.
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How Do Bank Card Transactions Work?
Credit card and debit card transactions are the most popular type of electronic transactions in the world because they are tied to the global monetary system and card providers such as Visa and MasterCard, which are accepted in most parts of the world.
A bank card transaction usually takes a couple of seconds to get confirmed, regardless of whether you’re using the card physically at the store by swiping it or tapping it on POS device, or you’re paying for products and services online by entering your card number, personal details, and security code.
The whole procedure has been streamlined to work smoothly and takes just a couple of seconds. Once you submit a payment through a physical or online POS, your card’s native payment network receives and processes the card information along with the payment details. The network runs a quick check of the card’s data to make sure the card is valid and, after confirmation, submits your payment request to the card issuer bank to make sure you have enough funds or credit available to make the payment.
When the bank confirms you’re eligible to carry out the payment, your payment network approves the transactions, and you receive a bill or an online confirmation of your payment. The procedure is very similar for ATM cash withdrawals.
The process might seem complex, but thanks to the massive size of global payment networks and the huge number of system validation points used by banks, a card payment gets confirmed within a few seconds.
Bank systems and payment networks rely heavily on centralised system architecture and validation points are always operated by the company or bank that owns the network, which is in sharp contrast with the decentralised nature of crypto payments.
How Do Crypto Transactions Work?
Unlike banks and payment networks, crypto transactions use blockchain technology to facilitate transfers between different blockchain addresses. When you’re conducting a transaction of let’s say Bitcoin (BTC), you’re actually sending BTC from one blockchain location, your BTC public address, to another public address that belongs to the receiving party.
In order to initiate a crypto transfer, you need to have the right private keys that prove your ownership over a specific amount of coins or tokens. The private keys are protected by crypto wallets and every transaction of your digital currencies needs to be initiated through your wallet app.
Once a crypto transaction is initiated, a cryptographic message is sent out through the blockchain, containing information about the sender, receiver, amount of coins, a unique transaction id (TXID), as well as a timestamp. Depending on the blockchain consensus mechanism of the coins you’re sending, your transaction needs to go through a verification procedure before it gets approved and sent to its destination address.
The transaction processing period depends on the blockchain you’re using. For example, if you’re sending a BTC transaction, then you’ll need to wait between 5 to 10 minutes on average for your transfer to get confirmed and processed. However, in case you’re using a much faster blockchain, like Polygon (MATIC) or Solana (SOL), your transfer will usually be confirmed within a few seconds.
Although both the bank card system and crypto transactions usually work smoothly, sometimes a transaction can take unusually long to get processed and finalised.
For example, when you order a product that needs to be shipped from another country and pay with your bank card online to a business that doesn’t have a branch in your country and isn’t tied to local banks, your payment might take considerably longer than the usual few seconds period to get processed.
This might happen because the communication between your card, payment network, your bank, and the receiver’s bank is quite complex due to a difference in time zones, or due to the several intermediary banks included in the process. In such cases, a transaction might stay pending for several business days, which can be quite frustrating for cardholders.
It’s also quite common to incur pending charges when paying at gas stations or hotels. Such payments are usually first displayed as pending payments in online banking apps. Additionally, if you have a new card that hasn’t been activated yet, your transaction will be pending until the bank activates it.
Services that support online transactions like PayPal can also have payment authorisation or processing issues, which can be a result of high network traffic or an unverified email address or mobile phone number on the part of the receiver.
Pending Crypto Transactions
When it comes to crypto transactions, blockchain traffic is the most common reason for delayed pending transactions. Some blockchains like Bitcoin and Ethereum (ETH) can slow down quite considerably in times of high network congestion because they aren’t very scalable and have a limited transaction processing capacity.
That’s why it’s much better to use highly scalable and fast blockchains like SOL, MATIC, Avalanche (AVAX), and Ripple (XRP) for crypto payments because they are much faster and achieve transaction finality in a matter of seconds.
All of these delays categorise transactions as pending transfers that are initiated and completed to some extent but are yet to be approved. In case you don’t have time to wait for a pending transaction to get approved, you might consider cancelling it and submitting a new one.
Transaction Cancelation: Debit Cards and Credit Cards
Cancelling a bank card transaction is pretty complicated because the whole payment approval procedure is automated and usually over in a matter of seconds. In case your transaction is pending for some time due to delays related to inter-bank communication and bank services, or problems regarding your payment network and connected financial institutions, you might want to cancel the transaction if you think there’s something wrong with it or if you simply want to abort the payment.
The reason why cancelling a pending debit card or credit card payment is difficult is because once you submit a payment, there’s a hold on your card’s funds for the amount of money you’re supposed to pay. This means that you haven’t been charged yet, and your bank account still hasn’t registered that you’ve submitted payment, but the amount is already in a pre-payment status, put on hold by the business you’re submitting payment to. The hold amount impacts the actual amount of available balance on your bank card.
If your transaction is pending, there’s nothing your bank or payment network can do because they didn’t yet make a charge to your account. To cancel your bank card transaction, you’ll need to contact the business you’re supposed to pay to and explain the situation, along with a request to free your funds. This way, you can stop payments without even contacting your bank.
If you didn’t manage to contact the payment receiver in time to free your funds, you can contact your bank or payment network and submit a request to dispute the payment and ask for a service reversal. Most payment providers are legally obliged to take your payment disputes into account and reverse your payment if you provide a valid explanation and say that you haven’t received the products you paid for yet.
In case your payment has been processed, and the receiver has already provided you with certain services or sent you the product you ordered, you can still get a portion of your funds refunded by either cancelling the services or by returning the ordered goods and submitting a refund request.
Transaction Cancelation: Crypto
Blockchain data blocks are immutable, and their contents can’t be changed once they’re approved. This means that your only chance to cancel a crypto transaction is to do it before it gets confirmed.
If your transfer gets processed through the blockchains and gets confirmed, there’s absolutely no way of cancelling it. That’s why it’s extremely important to double-check the receiving address before submitting a transaction and to be sure that you’re really willing to submit that payment.
With lightning-fast blockchains like Solana and Polygon, you don’t have any chances of cancelling a transaction because the average processing time is just a few seconds. However, Bitcoin transactions are much slower, especially during high network traffic when they can stay unconfirmed for over an hour.
You can always check the status of your BTC transaction with a blockchain explorer and see whether it has been confirmed or not. Many Bitcoin wallets like Blue Wallet and Electrum support the Replace-by-fee (RBF) protocol, which allows users to resend a BTC transaction with a higher fee in order to ensure that the transaction goes through and doesn’t stay delayed.
Transaction Cancelation: Crypto Payment Gateways
Apart from classic blockchain transactions, users often have issues with crypto payment gateways, such as Banxa and Simplex. These platforms are popular fiat to crypto payment gateways that enable users to directly purchase digital currencies with fiat cash either from their crypto wallet or through a fiat-friendly crypto exchange.
When purchasing crypto through these services your transaction depends both on your bank and the blockchain processing period because you’re buying crypto with fiat. If you want to cancel such a transaction, you need to directly contact the payment gateway and submit a support ticket request for cancelling your transaction. If the blockchain hasn’t processed the transfer yet, you can easily cancel it and receive your money back in your bank account.
Transaction Cancelation: PayPal
PayPal is one of the most popular online payment services in the world, enabling users to quickly pay for products and services through their account balances. However, sometimes PayPal transactions can run into problems that might cause transfer delays.
PayPal has a strict user policy that requires users to verify their email addresses or phone numbers to accept transactions. Many users tend to forget to do this until they’re supposed to receive a transfer. That’s why your transaction can sometimes stay pending due to such issues on the receiver’s end. Also, many users set up their PayPal accounts with an incoming transaction approval measure, which requires them to manually approve every incoming transfer.
The easiest way to overcome these obstacles is by directly contacting the receiver and making sure they’ve verified their account information with PayPal and that their incoming transactions are automatically approved. In case you want to cancel your PayPal transaction, the only way you can do it is by contacting the receiver and asking them to reject your transaction.
A Few Ending Words…
As you can see, there are specific solutions for every type of electronic financial transaction to cancel the process or solve the issue that’s causing your transfer to stay pending. Whichever type of transaction you’re dealing with, it’s important to be aware that there’s always a solution, despite some transaction cancellation procedures being a bit more complicated than others.
The best thing you can do is to double-check that you’ve got the amount and recipient details right before submitting a transfer and be sure that you’re really willing to submit payment and won’t change your mind or regret submitting it later.