Account Funding Transactions: Back-to-Back 

Back-to-Back funding transactions

Back-to-back funding in the context of payment transactions refers to a process where two linked transactions are executed sequentially to facilitate the transfer of funds between accounts. Specifically, the process involves an AFT (pulling funds from a cardholder account) followed immediately by an OCT (pushing funds to a recipient account) to complete a transfer. These transfers are mostly used for  digital wallets, peer-to-peer (P2P) payments, and cross-border remittances.

How It Works:

1. AFT (Pull): Funds are withdrawn from the sender’s card account (Visa or Mastercard) using an Account Funding Transaction. This debits the sender’s account and moves the funds to an intermediary account, such as a digital wallet or payment processor.
2. OCT (Push): The pulled funds are then immediately credited to the recipient’s eligible card account (debit card, credit card, prepaid card) using an Original Credit Transaction, completing the transfer.

Key Features:

• Purpose: Enables seamless fund transfers, such as P2P payments, merchant disbursements, or wallet-to-card transfers, by combining the pull and push mechanisms.
• Speed: The process is typically fast, with OCTs often settling in near real-time, depending on the network and issuing bank.
• Use Cases: Common in platforms like PayPal, Venmo, or remittance services, where funds are moved from one user’s card to another user’s card or account.
• Intermediary Role: A payment processor or service provider (digital wallet provider) often acts as the intermediary, coordinating the AFT and OCT to ensure smooth execution.

Example:

A user wants to send $100 to a friend using a P2P payment app. The app initiates an AFT to pull $100 from the sender’s Mastercard, then uses an OCT to push $100 to the friend’s Visa debit card. The back-to-back process ensures the funds are transferred quickly and securely.

This method is efficient for scenarios requiring the immediate availability of funds and is widely used in modern payment ecosystems to bridge different accounts or card networks.