A refund payout is a refund that reaches the customer as a separate outgoing payment instead of travelling back along the original transaction. A normal card refund is linked to the purchase and credited to the same card through the acquirer. A refund payout is used when that route is not available: the customer paid by cash, voucher or a bank transfer method that has no refund function, or the card has since closed.
The merchant, or a platform acting for it, collects the customer's bank or card details and sends the money over a payout rail such as an ACH credit, an instant bank transfer or push-to-card. The merchant bears the payout fee. Because the money can go to an account other than the one that paid, refund payouts carry fraud and money laundering risk, so providers verify the recipient and record the link to the original order for payout reconciliation.