Card Payments with Processor-Guaranteed Terms
Turn every authorization into a three-party agreement. Merchants encode promises, processors guarantee enforcement, and customers finally trust the offer—no more blind faith in unfamiliar merchants.
The Players Behind Every Card PayNote
Cardholder, merchant, and processor operate on familiar rails—but now they coordinate through a shared, conditional PayNote.
Payer
Cardholder (customer)
Authorizes the payment and exercises guaranteed rights such as refunds or cancellations.
Payee
Merchant
Defines the PayNote terms, submits delivery confirmations, and triggers capture when conditions are met.
Guarantor
Card processor / acquiring bank
Reviews the PayNote, enforces the conditions, and guarantees both customer and merchant obligations.
Currency
Fiat (USD, EUR, GBP, etc.)
Operates entirely on today’s card network rails—authorizations, captures, voids, and refunds.
Processor-Backed Guarantees, Zero New Rails
The merchant creates conditional terms, the processor guarantees enforcement, and the customer gains the confidence to buy. No core payment changes required.
Three-Party Trust Contract
Merchant and customer agree to processor-guaranteed terms, removing the need to trust each other directly.
Programmable Capture Windows
Captures occur only when processor-validated events—delivery, quality checks, trial expirations—are satisfied.
Guaranteed Customer Rights
Refunds and cancellations execute automatically when the customer exercises rights inside the PayNote timeline.
How the Three Parties Interact
The merchant initiates the PayNote during checkout, defining guarantees like refund windows or delivery requirements.
The card processor reviews and guarantees the terms.
- By opting in, the processor promises to enforce the merchant’s commitments.
- Customers exercise their rights directly with the processor—no need to argue with the merchant.
- Merchants trust the processor to validate legitimate customer claims before releasing funds.
Each party contributes to the process:
- Merchant authors terms, confirms delivery or quality, and requests capture.
- Customer authorizes payment and can trigger guaranteed refunds or cancellations.
- Card Processor enforces conditions, processes card network operations, and guarantees outcomes.
Merchant
- Creates PayNotes with explicit terms (refund windows, delivery checkpoints, quality confirmations).
- Uploads fulfillment evidence and triggers capture once requirements are satisfied.
- Benefits from processor validation that protects against fraudulent refund claims.
Card Processor
- Reviews PayNotes during checkout and guarantees the conditions they contain.
- Validates capture, refund, and dispute events before authorizing movement of funds.
- Charges premium fees for providing trusted arbitration between customer and merchant.
Customer
- Authorizes payment knowing the processor enforces promised rights and refunds.
- Exercises guaranteed rights directly with the processor—no merchant follow-up required.
- Trusts the processor to resolve issues quickly using shared evidence from the PayNote.
Why it matters: the processor becomes a trusted neutral party. Customers buy without fearing merchant misconduct, and merchants gain credibility without giving up control.
For the processor, this is a premium trust service. You enforce merchant promises, validate customer actions, and charge for the assurance you provide.
See How It Works
Basic card payment with processor-guaranteed terms. See how three-party agreements work.
Customer can cancel within the trial window—processor enforces the refund without merchant friction.
Authorization now, capture after delivery. Processor validates proof before releasing funds.
Example Use Cases
Guaranteed Refund Window
Processor-backed “7-day money-back” guarantee. Customer triggers refund directly with the processor; merchant cannot block it.
Trial Period Protection
Subscription trials with automatic refunds when the customer cancels within the agreed window.
Delivery Confirmation Capture
Authorizations convert to captures only after carrier or logistics data confirms successful delivery.
Quality Verification Requirements
High-value purchases require customer confirmation (or third-party inspection) before funds release.
Service Completion Validation
Professional services capture after customer-signaled completion, preventing premature billing.
Preorder Shipment Guarantee
If merchant misses shipment date, processor auto-refunds the authorization—customers trust the launch.
Value Proposition
For Card Processors
New Premium Revenue Stream
- Charge premiums for guaranteed-terms processing.
- Increase interchange for trust-layer transactions.
- Add per-refund and conditional capture fees.
- Monetize neutral-arbiter services between merchant and customer.
Unique Market Position
- Only processor offering enforceable guarantees that build shopper trust.
- Attract merchants who want to differentiate with processor-backed promises.
- Expand into high-risk verticals with structured, enforceable terms.
Better Risk Management
- Control when captures occur based on validated conditions.
- Reduce fraud from both merchant abuse and friendly fraud.
- Use rich evidence to resolve disputes before they become chargebacks.
For Merchants
Offer Guaranteed Terms
- Advertise processor-backed refund windows customers can trust.
- Convert cautious shoppers with guarantees they know will be honored.
- Compete with large marketplaces by offering comparable protections.
Protection from Abuse
- Processor validates legitimate customer claims before approving refunds.
- Evidence-based dispute resolution prevents bad-faith refund attempts.
- Shared records demonstrate compliance with promised guarantees.
Competitive Advantage
- Unlock new categories (custom, high-value, preorders) with credible guarantees.
- Differentiate brand with processor-backed trust messaging.
- Win customers who avoid unfamiliar merchants due to risk.
For Customers
Real Guarantees
- Refund rights enforced by processor, not reliant on merchant goodwill.
- No risk of being ignored or delayed when exercising rights.
- Clear visibility into what actions are guaranteed and how to trigger them.
Better Shopping Confidence
- Buy from new merchants with processor-backed protections.
- See enforceable terms upfront—no hidden fine print.
- Know the processor will ensure the merchant honors commitments.
Simpler Resolution
- Request refunds or cancellations directly with the processor.
- Avoid negotiating with merchants for promised outcomes.
- Retain standard chargeback rights if guarantees are breached.
Card Processor Operations & Risk Controls
What You See:
Standard card network requests enhanced with guarantee enforcement:
- Authorization requests (reserve funds on the card).
- Capture requests with condition validation before settlement.
- Guaranteed refund requests triggered by customers exercising rights.
- Void or refund requests that unwind authorizations or captured funds.
You continue to process everything through your existing settlement and clearing workflows—now with PayNote context.
Your New Role as Guarantor:
Before approving actions, you validate PayNote conditions:
- Captures: approve only when delivery, quality, or time-based milestones are met.
- Customer refunds: confirm requests fall within guaranteed windows and execute automatically.
- Merchant disputes: require evidence that terms were honored before declining customer claims.
- Timers: run scheduled triggers that auto-capture or auto-refund once time limits pass.
Your Risk Controls Still Apply:
Every request still flows through your existing stack:
- Fraud detection — score each transaction and block high-risk activity.
- Velocity checks — monitor for unusual spending or refund patterns.
- Card verification — enforce CVV, AVS, 3DS, and network rule requirements.
- Condition validation — ensure PayNote terms are still satisfied before releasing funds.
If a check fails, you decline the request with a reason code; the PayNote logs the outcome and notifies all parties.
Premium Service Pricing:
- Setup and configuration fees for guaranteed-terms merchants.
- Premium interchange or processing fees on PayNote-backed transactions.
- Per-refund fees for automated guarantee fulfillment.
- Tiered pricing for expedited validations or high-touch merchants.
What Changes Operationally:
You evolve from passive processor to active guarantor. Validate conditions before captures, execute customer rights automatically, maintain evidence for guaranteed terms, and resolve disputes with reference to the PayNote timeline.
FAQ for Card Processor Decision Makers
Do we need to change our authorization systems?
No. PayNotes sit above your existing card network infrastructure. You continue to process authorizations and captures the same way—PayNotes simply add validation of guaranteed terms.
What is our liability as guarantor?
You enforce the terms merchants declare. If a PayNote promises a refund within 7 days, you ensure it happens when the customer requests it. The merchant already consented when they issued the PayNote.
How do we price this service?
Consider a 0.5–1.5% premium over standard interchange plus per-transaction fees for guarantee enforcement. Merchants gladly pay because conversion lifts outweigh the added cost.
What about existing chargeback rules?
Chargeback rules remain unchanged. PayNotes reduce chargebacks by resolving issues through guaranteed terms before customers escalate to disputes.
Are we locked into a vendor?
No. The PayNote specification is open. Start with managed services, then migrate to self-hosted infrastructure whenever you prefer—documents remain portable.