AFT and OCT — Cracking Two Peas in a Pod

Backspace Tech
4 min readFeb 16, 2024
AFT (Pull) and OCT (Push) Payments

Imagine you’re at Lollapalooza and run out of cash for merchandise. Luckily, you have a digital wallet app that allows you to top up your balance instantly using your debit card.

  • You decide to add ₹1000 to your digital wallet.
  • You initiate the top-up within the app, by entering your debit card details followed by OTP.
  • This triggers a transfer of funds, and your wallet is funded to get your favorite merchandise.

This type of transaction is also known as a “PULL or Account Funding Transaction”.

Continuing the same track, you purchased something else too, but changed your mind last minute. So, the store guy refunds the amount to your wallet.

This type of transaction is called as “PUSH or Original Credit Transaction”.

Lost in the Sauce?

Don’t worry! We got you!

The PULL — Account Funding Transaction (AFT)

AFT represents a mechanism employed by payment service providers to facilitate the movement of funds. Characterized as a “pull” transaction, it is initiated by the cardholder and completed by the financial institution. This type of transaction is applicable when the cardholder wishes to fund their other payment method, for example, digital wallets, bank-to-bank transfers, etc…

AFT grants control over the timing and amount of the withdrawal to the provider. This process operates within a regulatory framework encompassing the rules established by card networks (e.g., Visa, Mastercard), individual card issuer regulations, and relevant financial transaction standards. The recipient, often the party initiating the transfer, plays a crucial role by consenting to the necessary permissions and specifying the withdrawal amount.

AFT serves a multitude of purposes within the payment landscape, including:

  • Replenishing prepaid card accounts: This enables users to conveniently add funds to their prepaid cards for subsequent transactions.
  • Facilitating account transfers: It allows for seamless movement of funds between different accounts, such as transferring money from a checking account to a savings account.
  • Enabling P2P transfers: Facilitate P2P money transfers, fostering convenient and efficient exchange of funds between individuals.
  • Loading digital wallets: It allows users to effortlessly fund third-party digital wallets utilizing their payment cards, expanding their payment options, and enhancing their financial flexibility.

Buckle Up!

Let us know the workings!

The Inner workings of AFT

Consider you have a digital wallet named “Fin Buddy”. The instantaneous addition of funds to your Fin Buddy wallet is orchestrated by the AFT process. Let’s delve into the intricate interplay!

1. You initiate a fund addition to your Fin Buddy wallet.

2. Fin Buddy sends a request to your bank

3. Your bank receives the request and validates your account details.

4. Once your account details are confirmed and fund availability is checked, you receive an OTP from your bank for authentication.

5. Upon entering the OTP, your bank transfers funds to your Fin Buddy wallet, and your wallet is credited accordingly.

6. You receive confirmation of the successful fund transfer.


That’s the “PULL” magnetism in action!

The PUSH — Original Credit Transaction (OCT)

Unlike AFTs, which involve the pulling of funds from a cardholder’s account, OCTs operate as a push mechanism, directly crediting funds to a designated card or account.

OCT is commonly employed for:

· Direct deposits (payroll, government benefits, tax refunds) and

· Business disbursements (refunds, cashback rewards).

To get a better understanding of the OCT, consider this scenario: You purchase a dress online using your card, but upon arrival, you discover it’s damaged. You return the item, and the merchant refunds your payment back to your original payment method aka your card. This refund by the merchant is what OCT is in a nutshell.


Wondering how the merchant accurately refunds your account? This is precisely achieved through the “Card on File (CoF)” process.

The Fine Line


Let us spill the tea on the popular AFT and OCT Goodies!

The Most popular AFT and OCT products are Visa Direct and Mastercard Send.

But wait!

This is where the plot thickens.

Could AFTs and OCTs Spark Disputes or Chargebacks?

Absolutely! But only OCT ignites it.

AFT is not subjected to Dispute/chargeback as it is cardholder-initiated and there is no intervention from the merchant.


OCT is subjected to dispute and chargeback as it involves P2M.

Presently, the Card network Visa only has a separate dispute category for OCT transactions. Which comes under:

Reason code: 13.8

Dispute name: Original Credit Transaction Not Accepted.

So next time you credit your waller remember it is a “Pull” transaction aka AFT and when the merchant refunds you it is a “Push” transaction aka OCT.

Well, that’s it for today!

Until then, happy reading!

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P.S: What topic do you think we should explore next? Let us know in the comments.



Backspace Tech

Backspace Tech offers Fintech-as-a-Service to automate,simplify, and disrupt the payment industry by handling chargeback requests through a plug-and-play model.