Voucher Payment

A voucher payment is a payment method that connects cash to online commerce. The customer does not enter card or bank details at the checkout. Instead they receive, or have already bought, a voucher: a document or code that stands for a specific amount of money. The payment is completed when cash is handed over at a physical location or when the code is redeemed.

Voucher methods are important in countries where many shoppers have no card or bank account, or prefer not to use them online. They are a category of local payment method, and international merchants usually add them through a payment service provider when entering markets such as Brazil, Mexico and Japan. Two different models share the name.

In the first model the voucher is created at checkout. The merchant's payment provider generates a slip containing the amount, an expiry date and a barcode or numeric reference. The customer prints it or opens it on a phone and takes it to a participating convenience store, bank branch, post office or cash machine, where a cashier scans the code and accepts cash. Many slips can also be paid from online banking.

The collection point reports the payment to the voucher network, which notifies the payment provider, which in turn informs the merchant, usually by webhook notification. Only then does the merchant ship the goods or deliver the service. The best-known examples are Boleto in Brazil, OXXO in Mexico and convenience store payment in Japan.

In the second model the customer buys the voucher first. A shop, kiosk or online reseller sells a code, typically a 16-digit number, worth a fixed amount. The buyer later enters the code at an online merchant's checkout, and the value is deducted. Unused value may remain on the code or be moved to an account with the voucher issuer.

These products are widely used for gaming, digital content, gambling where it is legal, and by people who do not want to share financial details online. In Europe the issuers are generally regulated as issuers of electronic money. The structure resembles a prepaid card without the card.

Voucher payments behave differently from card payments in several ways.

• They are asynchronous. A post-paid voucher is an asynchronous payment. The order sits in pending status for hours or days until the customer pays, and stock may need to be reserved in the meantime.
• Many are never paid. A large share of generated slips expire unused, because customers change their minds or forget. Merchants send reminders and set expiry periods to manage this, and they should not count a generated voucher as a sale.
• Payment is hard to reverse. There is no chargeback right as with cards, which protects the merchant from that kind of dispute.
• Refunds need a separate route. Cash cannot be sent back down the same path. The merchant must collect bank details and make a refund payout, or issue store credit.
• Reconciliation depends on the reference. Each voucher carries a unique payment reference that links the cash received to the order.
• Settlement is slower. Funds reach the merchant some days after the customer pays, net of the voucher network's fee.

For people who are unbanked or have no card that works online, vouchers are often the only way to buy from an internet merchant other than cash on delivery. Others have accounts but are wary of entering card details on websites, want to keep spending within the cash they have, or wish to keep certain purchases off their bank statements. The dense networks of convenience stores and banking agents in the main voucher markets make paying in person a small inconvenience.

Post-paid vouchers have been used in fraud aimed at payers. Criminals send fake slips by email or alter the details on genuine ones so that the cash goes to their own account. Operators have responded with registration of slips in central databases and with verification of the payee before payment.

Prepaid vouchers raise different concerns. A code bought with cash and usable online is close to anonymous, which makes it attractive for money laundering and for scams in which victims are told to buy codes and read them out to the fraudster, much as in gift card scams. European anti-money laundering rules have progressively lowered the value that anonymous prepaid products may carry and restricted their use online, and issuers apply purchase limits and require identification for larger amounts.

Instant payment systems are reducing the role of cash vouchers in some of their strongest markets, since a customer with any bank or wallet account can now pay online in seconds. Voucher operators have adapted by adding QR codes that can be paid instantly from a banking app while keeping the cash option. Vouchers remain a significant method for reaching customers who still rely on cash, and merchants entering those markets typically offer them alongside cards and instant payments.