Pull Credit Transfer
A "Pull credit Transfer" is a credit transfer where:
- the credit transfer is initiated by the payee
- authentication is performed by the payer (mandatory)
Recall that Credit Transfers were designed to transfer funds from account to account. When done in the context of a purchase, it makes more sense operationally for the payee (e.g., the merchant) to initiate the credit transfer, thus the pull credit transfer. Typically this is followed by authentication and acceptance of the credit transfer by the payer.
The pull credit transfer enables merchants to simulate some of the characteristics of a (pull payment) card system:
- delay fund transfer until delivery is in progress.
- decrease the amount (??What does this mean??)
Even if those flows bring some improvements, several issues remain:
- flows (6) and (7) should be normalised in some ways. If not, it will be impossible for any merchant to connect to an arbitrary bank because they have no prior technical or contractual relationship.
- Even if the merchant could wait to trigger the fund transfer, she should not wait too much. Indeed, even if there is the consent of the payer, the funds are not reserved in an escrow system. Thus, if the payer makes another payment, she might deplete the balance of the account, and the credit transfer will not be submitted.
- It is quite impossible for the bank of the payer to authenticate the merchant.