What type of payment processing withdraws money from bank account whether the account has the funds or not?

Question

Im trying to understand the terminology involved in this process. The situation im referring to is this:

Some companies will charge cards, and take the money out of the account, whether your account can cover the charge or not, whether you have "overdraft" capabilities or not.

For instance, I have not authorized my bank to cover any overdrafts. But if I send a payment to my credit card company for $500, but my account only has $100 in it, the credit card company WILL take out all $500, instead of returning the payment or something. my account would then be -$400.

What kind of payment is this? How can I communicate to a payment processor like Stripe/PayPal? Im pretty sure one type of payment (ACH payments) will have this affect. But I also know this can happen from using debit cards.

For instance, in Stripe, card paymentscan have different funding types like: "credit", "debit", "prepaid", or "unknown". Unsure if this has something to do with my question.

What is the name for an electronic debit card payment or capability that creates this effect?

Answer 1

This isn't a type of payment per se, but rather something up to the bank/etc. behind the account. Credit cards can permit small purchases over their limit, banks can permit overdrafts with ACH or checks; it's not a matter of the form of payment (though only some forms of payment can - obviously a cashier's check wouldn't have this functionality - but it's not only a single form). In both cases, they may charge a fee for going "over the limit" (credit cards) or being "overdrawn" (banks/checks).

Note that this is also country specific, some countries have more limits than others on overdrafts.