Lesson 4 of 13
Payment states.
The life of a payment as a state machine: created, authorized, captured, settled, refunded, and disputed.
By Nagesh Koritala 4 min read Last verified: November 2026
- Lesson 1: Improve the checkout
- Lesson 2: The checkout flow
- Lesson 3: Authorization
- Lesson 4: Payment states (this lesson)
- Lesson 5: Capture
- Lesson 6: Clearing and settlement
- Lesson 7: Cash capture
- Lesson 8: Returns and refunds
- Lesson 9: Disputes
- Lesson 10: Tokens and stored credentials
- Lesson 11: Transaction types
- Lesson 12: Complete reference
- Lesson 13: Payments compliance
Engineers model a payment as a state machine. It helps product people too, because every bug report and every support ticket is really a question about which state a payment is in. Press the actions below and watch where the payment can and cannot go.
This is the simplified model. For the exact statuses real providers use for payments, refunds, disputes, subscriptions, invoices, and payouts, see the Statuses tab in lesson 12.
Sources for this guide
Card network rules change. Time limits, fees, and authorization windows here reflect published rules and provider documentation as of late 2026; confirm details with your processor before you build against them.
Sources
- Visa authorization and clearing time frame changes, April 2024 (TD Bank summary)
- Checkout.com: Visa authorization processing time frames
- Stripe: Place a hold on a payment method
- Revolut: Clearing windows by card brand
- Moov: Card-not-present best practices
- Adyen: Dispute timeframes
- Cybersource: Stored credential framework (CIT, MIT, standing instructions)
- VGS: DPAN vs MPAN
- Stripe: Apple Pay merchant tokens
- Google Pay: Payment data cryptography (PAN_ONLY and CRYPTOGRAM_3DS)
- Checkout.com: Google Pay authentication methods and liability shift
- Solidgate: Why the Apple Pay card number differs from the card
- Spreedly: Payment Account Reference (PAR)
- Visa: Authorization and reversal processing best practices
- Visa: Authorization framework time frames (2024)
- Visa: Declined transaction resubmission rules
- Visa: Dispute management guidelines for merchants
- Visa: VAMP fact sheet
- Visa: Account Updater FAQ
- Mastercard: Chargeback Guide, Merchant Edition
- Mastercard AN 5524: CIT and MIT indicators (via AIB Merchant Services)
- Mastercard Gateway: Cardholder and merchant initiated payments
- Adyen: Mastercard Transaction Link Identifier
- American Express: US Disputes Reference Guide
- American Express: International Merchant Regulations
- Adyen: Adjust authorisation (validity by brand)
- Apple: Merchant tokens (MPANs)
- Apple: Payment token format reference
- Apple: Merchant Token Notification Services
- Google Pay: Merchant-initiated transactions
- Google Pay: Token lifecycle management
- Stripe: PaymentIntent lifecycle
- Stripe: Refund object
- Stripe: Dispute object
- Stripe: Subscription object
- Stripe: Decline codes
- PCI SSC: Future-dated requirements of PCI DSS v4.x
- Report URI: SAQ A changes in PCI DSS 4.0.1
- SecureTrust: PCI DSS SAQ types
- Chargeback Gurus: Regulation II and card-not-present debit
- Baymard Institute: Cart abandonment rate statistics (updated September 2025)
- Baymard Institute: The current state of checkout UX (2025)
- Baymard Institute: Checkout optimization and average form fields (2024)
- Baymard Institute: Inline form validation
- Baymard Institute: Adaptive validation error messages
- Adobe: 2025 US holiday shopping season
- US Department of Justice: Guidance on web accessibility and the ADA
- W3C: Web Content Accessibility Guidelines (WCAG) 2.2
- Apple: Human Interface Guidelines, accessibility
- Stripe: How to increase checkout conversion
- Stripe: The checkout process, reducing friction
Your progress stays on this device.
Next: Lesson 5
Capture.
Charging when goods ship: split shipments, partial captures, and reauthorization when a hold expires.
Questions about payments? Email me. I read every note.