Paying by bankcard has become an everyday gesture, a mechanism so well oiled that we forget the underlying legal complexity. Every transaction, whether carried out in a local shop or on the internet, is an act that involves several parties and is governed by precise rules. This act, which may seem trivial, is in reality a payment order whose implications need to be understood by consumers and professionals alike. Our firm has observed that many disputes could be avoided by a better understanding of the rights and obligations of each party. The aim of this article is to shed light on the mechanisms involved in the issue and irrevocability of card payments, a subject at the heart of our practice in banking and financial law, and which is part of our commitment to the protection of consumers. the complete legal guide to payment cards we offer.
The card payment order mechanism
The act of paying by card is legally analysed as a mandate to pay given by the cardholder to the issuing institution (his bank), for the benefit of the merchant. This mandate is formed at the time of the transaction and triggers a series of interbank operations. It is vital to understand the form it takes and how to prove it, particularly when unusual or disputed debits appear on an account statement.
The form of the payment order: no specific formal requirements
Unlike other instruments such as cheques, card payment orders are not subject to any strict legal formalities. Its validity does not depend on a medium or a sacramental formula. In practice, there are several ways of giving this order, all of which have the same legal value:
- Entering the PIN on an electronic payment terminal (EPT).
- Signing an invoice, a procedure that is increasingly rare in France for local payments but still common abroad or for certain large amounts.
- Remote communication of card details (number, expiry date, visual cryptogram) for an online or telephone purchase.
This flexibility facilitates commercial exchanges, but shifts the stakes to the ability to prove that the order was indeed given by the legitimate account holder.
Proof of the payment order: when the debit is undue or erroneous
The issue of proof arises acutely when a cardholder disputes a transaction. The dispute may arise from a simple error, a technical malfunction or, more seriously, fraudulent use of the card or its data. In this context, it is essential to determine who has to prove what.
In principle, it is up to the bank, as the custodian of the funds, to justify the use made of them and therefore to prove the regularity of the disputed payment transactions. The bank must show that the transaction was correctly authenticated, recorded and accounted for, and that it was not affected by a technical fault. If this is not the case, the banker must credit the customer's account again.
Burden of proof and means of proof (electronic, signature)
The means of proving the payment order vary according to the method used. For a payment with a signature, the signed receipt is the main piece of evidence. It is up to the merchant, and by extension the bank, to ensure that the signature matches the signature on the back of the card.
For electronic transactions, evidence is based on computer records. The Act of 13 March 2000, and more recently the Order of 10 February 2016 reforming the law of contracts and evidence, have given full legal value to electronic writing. Article 1366 of the Civil Code states that "electronic documents have the same evidential value as paper documents".provided that its author can be identified and that it is stored in conditions that guarantee its integrity. The electronic signature, defined in article 1367 of the same code, is based on a reliable identification process. In the case of payment by card with a confidential code, the recordings of the payment terminal, which attest to the correct composition of the code, constitute solid proof of the authentication of the order. Case law considers that this computer data gives rise to a simple presumption on the part of the cardholder, who must then demonstrate a system failure or fraud in order to rebut this presumption.
The obligations of the merchant (supplier) when issuing the payment
Merchants who accept card payments, known as "acceptors", are not simply spectators to the transaction. By joining a payment network, they subscribe to specific obligations in the card acceptance contract which aim to secure the entire system. Compliance with these obligations conditions the payment guarantee offered by the issuing bank.
Card verification (validity, authenticity of signature, stop list)
Even though electronic terminals have automated many of the checks, retailers still have a duty of care. They must check the apparent validity of the card, in particular its expiry date. Where a signature is required, they must carry out a reasonable check to ensure that it matches the signature on the card. A signature that is clearly forged or missing may constitute a fault on the part of the cardholder. Lastly, they must comply with the procedures relating to stop lists, which are now included in electronic authorisation requests. Accepting a payment with a card that has been reported lost or stolen will result in the loss of cover.
Request for special authorisation for large amounts
Acceptance contracts specify payment limits above which the merchant must request authorisation from the card network management centre. This threshold varies according to the sector of activity and the associated level of risk. The payment terminal usually handles this request automatically. Obtaining this authorisation is an imperative condition for the transaction to be guaranteed. If the merchant omits this step or ignores a refusal of authorisation, they run the risk of not being paid, particularly if the cardholder's account turns out to be insolvent.
Consequences of failure to complete checks (risk of default)
Failure by the merchant to fulfil his verification obligations has a direct and major consequence: the loss of the payment guarantee. If a transaction is found to be fraudulent and the merchant's fault is established (for example, accepting an out-of-date card or failing to check the signature), the cardholder's bank is entitled to reject the payment. The merchant will then be solely responsible for the outstanding amount. The aim of this rule is to make each player in the payment chain accountable and to maintain confidence in the system. This is why a precise knowledge of their contractual obligations is essential for any professional accepting this method of payment.
The principle of irrevocability of card payment orders
Once a card payment order has been given, it becomes final. This principle of irrevocability is at the heart of transaction security and protects the merchant against late challenges. It fundamentally distinguishes card payments from other mechanisms such as direct debits, which can be challenged more easily. In this respect, it is similar to the system applicable to bank transfers, although the procedures differ. For a comparative analysis, it may be useful to refer to the legal framework for bank transfers and their irrevocability.
The basis of irrevocability and its textual consecration (CMF)
The principle of irrevocability, which has long been enshrined in the standard contracts of bankcard networks and in case law, is now firmly enshrined in law. Article L. 133-8 of the French Monetary and Financial Code states that payment orders sent via a payment instrument such as a card are irrevocable. The purpose of this provision, which stems from the transposition of European directives, is to harmonise and secure payments within the single market. Consent is deemed to have been given when the transaction is authenticated (entering the secret code, validating the online purchase). From that point onwards, the payer cannot reverse his or her decision.
The scope of irrevocability and the unenforceability of contractual defences
The scope of this principle is very broad and provides strong protection for the beneficiary of the payment. This means that the cardholder cannot stop payment for a reason related to the commercial relationship with the seller. For example, a dispute over the quality of a product, a delivery fault or poor performance of a service does not constitute a valid reason for revoking the payment order. Exceptions arising from the sales or service contract cannot be invoked against the payment order.
Cardholders must therefore settle their commercial disputes directly with the seller, through the ordinary legal channels, without being able to use the payment system to exert pressure. The only way to dispute a payment is to lodge a stop payment, but this is strictly limited by law to cases of loss, theft, fraudulent use of the card or the data linked to it, and the receivership or liquidation of the beneficiary.
Legal support for disputes relating to the issue or irrevocability of card payments
The apparent simplicity of payment by card masks legal rules which, if ignored, can have major financial consequences for both private individuals and professionals. Disputes can arise at every stage of the process. Consumers may be confronted with fraudulent debits and come up against the arguments of their bank, which invokes gross negligence to refuse reimbursement. A trader, on the other hand, may be faced with an unpaid bill as a result of an error in compliance with verification or authorisation procedures.
The principle of irrevocability, although protective of the trader, can put the consumer in a tricky situation when faced with a dishonest seller. Knowing how to distinguish legitimate cases of opposition from a simple commercial dispute is therefore essential. In all these situations, the assistance of a lawyer with a dedicated banking law practice is crucial in assessing the situation, gathering the relevant evidence and effectively defending your rights. Our firm is regularly involved in resolving these disputes, always seeking the most appropriate solution, whether amicable or contentious.
The financial stakes involved and the complexity of the applicable rules often make sound legal advice essential. To take stock of your situation and benefit from tailored support, contact our law firm, in particular for our legal service specialising in bank fraud.
Sources
- French Monetary and Financial Code, in particular articles L. 133-7, L. 133-8 and L. 133-19.
- Civil Code, in particular articles 1366 and 1367 relating to electronic evidence.
- Directive (EU) 2015/2366 of the European Parliament and of the Council of 25 November 2015 on payment services in the internal market (PSD2).
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