Document 1357967

10/20/2014
Document 1357967.1
Credit Card Payments, Refunds and Chargebacks: Overview and Setup for Oracle
Receivables Release 12 (Doc ID 1357967.1)
In this Document
Purpose
Scope
Details
1. Overview
2. Setup for Credit Card Payments
a. Oracle Payments setup
b. Define Remittance banks
c. Define a Receipt class and associated Receipt Method
d. Document Sequence
e. Profile Options
f. Customer Setup
3. How to create a Credit Card Payment
4. Setup for Credit Card Refunds
a. Receivable Activity
b. Lookup Code
c. Receipt Class
5. How to Create a Credit Card Refund
6. Credit Card Chargebacks
7. Credit Card / Fund Transfer Errors
8. Credit Card Processing, Known Issues and Patches
Still Have Questions?
References
APPLIES TO:
Oracle Receivables - Version 12.0.0 and later
Information in this document applies to any platform.
Checked for Relevance on 25-July-2013
PURPOSE
Oracle Receivables (AR): Receipts Workbench Information Center > Note 1357967.1
This document provides an overview and setup requirements to use the Credit Card Feature in R12 Oracle
Receivables. It includes information on how to use credit cards for payments, creating credit card refunds (Manually
and Automatically - via the Automated Receipt Handling for Credits), recording credit card chargebacks and
correcting credit card errors.
SCOPE
Focus of this setup is Oracle Receivables Release 12. Although most of the content in this note is also applicable in
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Release 11.5, some features described are only available in Release 12.
DETAILS
1. Ov e rv ie w
Credit card payments are a mainstream form of payment, and Oracle Receivables supports using Credit Cards for
payment of open debit items. When a credit card number is provided as payment, funds will be transferred by the
credit card issuer to your bank account on behalf of the customer.
The method of processing a credit card as a form of payment is similar to the process used for Automatic Receipts
and Remittance.
The Automatic Receipts creates a batch of receipts associated to credit card payments. Upon Approval, these
receipts are authorized and the payment amount is reserved from your customer's cardholder account and the
transaction is marked as closed. During Automatic Remittance, program integrates with Oracle Payments to
capture the payment from the customer's bank account and transfers it to yours on the receipt maturity date.
Oracle Payments handles the funds settlement processing as part of the funds capture process request that
Receivables initiates.
Following illustrates the process flow:
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Occasionally, there will be cases wherein the credit card payment you received has to be returned. Oracle
Receivables supports the following:
Credit Card Refunds: The customer has contacted you directly and requested for return of credit card
payment funds.
Credit Card Chargebacks: The customer contacted the Credit Card issuer and requested for return of
credit card payment funds. The Credit Card issuer, deducts the amount from your bank account, gives it
back to the customer as a refund, then the Credit Card Issuer notifies you that a credit chargeback has
occurred.
These 2 methods are described in more detail below.
2. Se tup for Cre dit Card Payme nts

a. Oracle Payme nts se tup
The Oracle Receivables credit card feature is tightly integrated with Oracle Payments. When
processing a Receipt using a Receipt method with Payment Method = Credit Card, Oracle Payments
will be invoked. You need to perform the minimum setup requirements for Oracle Payments to be
used.
Please review Note 553614.1, Oracle Payments Minimum/Dummy Setup For Credit Card/Purchase
Card Funds Capture Processing
Currently there is no functionality within Oracle Receivables to support an Authorization process other
than Oracle Payments.
b. De fine Re mittance banks

A remittance bank is the bank to which your customers will remit their payments to. This is your
company's bank. In Release 12, when you create a bank using the navigation path below, you are
creating an "Internal" Bank.
Responsibility: Receivables Manager
Navigation: Setup > Receipts > Banks
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c. De fine a Re ce ipt class and associate d Re ce ipt M e thod

Define the class and the associate method which you will use in your transactions to indicate that
debit item will be paid via Credit Card.
Navigation: Setup > Receipts > Receipt Classes
You can also define how to handle Fund Transfer errors.
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You need to associate the Remittance Bank Account you created in step b, to the Receipt Method:
d. Docume nt Se que nce

Since the processing of Credit Card payments is going to be handled like Automatic Receipts, you
need to setup the Document Sequence that Oracle Receivables will use when it processes the credit
card "receipts.
There are 3 steps in setting up the document sequence for Oracle Receivables to use for Credit Card
payments.
1) Create the Sequence
Responsibility: System Administrator
Navigation: Application > Sequential Numbering > Define
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2) Review the Category

Navigation: Application > Sequential Numbering > Categories
When you created the Receipt Method in step c above, Oracle Receivables automatically created a
Document Category with the same name
3) Assign the Sequence to the Category

Navigation: Application > Sequential Numbering > Assign
The following shows the Document tab, with one row defined as Method = Automatic and the other
Manual
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The following shows the Assignment tab for each of the rows highlighted in the Document tab:
Please review Note 1086565.1, How To Setup Document Sequences In Receivables for additional
details on understanding the options and setting up document sequences.
e . Profile Options
Navigation: Profile > System
Query for Profile Option Name = Sequential Numbering
Since the processing for Credit card payments is handled like Automatic Receipts, the process will
auto-create receipts and the numbering used will require Document Sequences, which in turn
requires you to enable Sequential Numbering.
Also provide values for the Profile Options:
ICX: Oracle Payment Server URL
IBY: ECAPP URL (See the Chapter on Profile Options in the Oracle Payments Implementation
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Guide)
The value of the above profiles should match, and should have the format:
http://hostname.domain.com:portnumber/servlet/ecapp
For additional information, review Note 333676.1, Oracle iPayment White Paper
f. Custome r Se tup
Navigation: Customers > Customers
Query up the customer who will use the Credit Card as payment, and associate the Receipt Method
and Credit Card Number in the Payment Details tab at the Account and/or Site Level
If you need setup information for Oracle Receivables Release 11.5, please review Note 224158.1, Credit Card Setup
Talk Paper
3. How to cre ate a Cre dit Card Payme nt
Once you have completed the setup requirements listed above, you can create credit card payments by associating
a Credit Card Receipt and Payment Method to the Invoice.
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Make sure you click on Select Instrument button to associate a specific Credit Card
Later, when you run the Automatic Receipts process, all invoices associated to the Payment Method you choose will
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be processed.
4. Se tup for Cre dit Card Re funds

a. Re ce iv able Activ ity
To properly handle the accounting involved for a Credit Card Refund, you need to create a Receivable
Activity with the Credit Card Refund Activity type.
Navigation: Setup > Receipts > Receivable Activities
In Activity GL Account, enter the Refund Clearing GL account you would like Credit Card Refunds to
use.
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b. Lookup Code
To capture the reason you are refunding a credit card payment, define Credit Card Refund reversal
reason lookups (This step is optional).
c. Re ce ipt Class
The transaction you are refunding a payment for, should have a payment method that is associated to
a receipt class that has:
Remittance Method = Standard, and
Require Confirmation = No
See the Receipt class setup in step 2.c. above.
5. How to Cre ate a Cre dit Card Re fund

The following graphic illustrates the Credit Card Refund process.
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Note:
You can only create a credit card refund against a receipt that was paid via Credit Card. If the original receipt
was paid via another method, for example: Direct Debit or Cash or Check, Oracle Receivables will not allow you
to issue a Credit Card Refund.
1. Find the original credit card payment.
a. Query the receipt.
b. The receipt's state must be REMITTED, otherwise you will get an error when you attempt to create a
Refund.
2. Select the applications button. Before you can create a Refund, the receipt needa to have an Unapplied
balance.
a. Unapply the receipt from the invoices to be refunded. Alternatively, you can Apply the Receipt to an
On-account credit memo. The net effect is to make the receipt have an unapplied balance.
b. Once the receipt has an unapplied balance, create a new row in the Applications form and Apply to a
Receivable Activity with Type = Credit Card Refund. In our sample setup in step 4.a above, this would
be CC Refund
c. The refund amount will default to the Unapplied balance of the receipt. You can change the amount if
necessary.
d. Save your changes, this creates a credit card refund negative miscellaneous receipt.
e. The reference type and reference number in the application line refers to the automatically generated
negative miscellaneous receipt - the refund receipt.
3. Query the negative miscellaneous receipt created, this is the refund receipt. It will have status = CONFIRMED
and will contain a Reference Type = Receipt and a Reference Number = original credit card payment; the
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remittance tabs will be enabled for the credit card refund receipt.
4. Once the refund receipt has been created it must be remitted in order to transfer funds from your account to
the customers credit card account.
a. When remitting any credit card transaction, always enter the Receipt Class and Payment
Method.This information lets Receivables know it is a credit card related transaction and to call
iPayment.
b. The approval step sends a signal to iPayment, which initiates the transfer of funds.
c. Review the output of the remittance process. Once the refund receipt has been successfully
remitted, the status of the negative miscellaneous receipt becomes REMITTED and the funds
are transferred back to your customer's account.
You can also create Credit Card Refunds automatically via the Automated Receipt Handling for Credits feature. For
more information on this feature, please review Note 283125.1, Automated Receipt handling For Credits: Overview
and Setup
6. Cre dit Card Charge backs

A credit card chargeback occurs when instead of contacting you for a refun, the customer contacted the iCredit
Card Issuer instead. The Credit Card issuer processes the refund on your behalf - taking the money from your
account and moving it back to the customer's account. After this is done, the Credit Card issuer advises you that a
credit card chargeback was issued. Following are the steps to record it within Oracle Receivables
Navigation: Setup > Receipts > Receivable Activities
Check that you have defined at least one activity with Type = Credit Card Chargeback
Navigation: Receipts > Receipts
1. Query the credit card receipt that the chargeback was requested for, check that the State = Remitted
(Otherwise you cannot create a Credit Card Chargeback)
2. Click on the Apply button to navigate to the Applications form
3. Find the Invoice that was refunded and uncheck the Apply checkbox
4. Create a new application line. In Apply To, choose the Receivable Activity you defined with type = Credit
Card Chargeback.
This automatically generates a negative miscellaneous receipt (similar to Credit Card Refunds)
Notes:
The credit card issuer has already deducted your bank account for the chargeback amount. Even
if the negative miscellaneous receipt status is created with a status of Confirmed (based on the
original receipt class), the money has already been remitted back to the customer. When this
negative miscellaneous receipt is included in a remittance batch, Receivables will change the
receipt status to Remitted, but will not perform any other action on this receipt.
7. Cre dit Card / Fund Transfe r Errors

While processing credit card payments, it is common to encounter issues in the integration with Payments during
the authorization/capture of funds. To quickly view errors and make manual corrections you can use the Correct
Funds Transfer Errors form.
For more details on this form please review: Note 401337.1, Correct Credit Card Errors or Correct Funds Transfer
Errors Form: Overview, Usage, Known Issues and Patches
8. Cre dit Card Proce ssing, Known Issue s and Patche s

Note 1368658.1, Credit Card Payments, Refunds and Chargebacks: Known Issues and Patches
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Still Hav e Que stions?
To discuss this information further with Oracle experts and industry peers, we encourage you to review, join or
start a discussion in the My Oracle Support Receivables Community.
To provide feedback on this note, click on the Rate this document link.
REFERENCES
NOTE:333676.1 - Oracle iPayment White Paper
NOTE:1086565.1 - How To Setup Document Sequences In Receivables
NOTE:1357967.1 - Credit Card Payments, Refunds and Chargebacks: Overview and Setup for Oracle Receivables
Release 12
NOTE:1362278.1 - Information Center: Overview of the Receipts Workbench in Oracle Receivables (AR) 11.5 and
later
NOTE:1368658.1 - Credit Card Payments, Refunds and Chargebacks: Known Issues and Patches
NOTE:224158.1 - Credit Card Setup for Oracle Receivables Release 11.5
NOTE:283125.1 - Automated Receipt handling For Credits: Overview and Setup
NOTE:401337.1 - Correct Credit Card Errors or Correct Funds Transfer Errors Form: Overview, Usage, Known
Issues and Patches
NOTE:553614.1 - Oracle Payments Minimum/Dummy Setup For Credit Card/Purchase Card Funds Capture
Processing
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10/20/2014

2. Se tup for Cre dit Card Payme nts

b. De fine Re mittance banks

c. De fine a Re ce ipt class and associate d Re ce ipt M e thod

You can also define how to handle Fund Transfer errors.

d. Docume nt Se que nce

2) Review the Category

3) Assign the Sequence to the Category

3. How to cre ate a Cre dit Card Payme nt

4. Se tup for Cre dit Card Re funds

5. How to Cre ate a Cre dit Card Re fund

6. Cre dit Card Charge backs

7. Cre dit Card / Fund Transfe r Errors

8. Cre dit Card Proce ssing, Known Issue s and Patche s

Still Hav e Que stions?

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