A payment is not a point-in-time occurrence; it is a journey. A single transaction may exist for weeks, moving through various stages: Created -> Pending -> Authorized -> Captured -> Settled -> Reconciled (or Failed, Refunded, Disputed).
Managing this journey requires a Finite State Machine (FSM). Hardcoding if/else statements in your codebase leads to "Zombie States" (e.g., a payment that is both Failed and Settled). An FSM enforces strict transition rules, ensuring a payment can only move forward along valid paths, automating the lifecycle from swipe to financial report.
Defining Valid Transitions
The FSM acts as the guardrail for money movement. Valid Transition: Pending -> Authorized. Invalid Transition: Failed -> Authorized. If a processor sends a webhook saying a Failed payment has been Authorized (which happens in buggy external APIs), the FSM rejects the update and alerts an engineer, rather than corrupting the database. This defensive programming is essential when integrating with third-party banking APIs.
Terminal States and Reconciliation
Automation relies on driving every transaction to a "Terminal State." Active States: Pending, Authorized, Dispute_Open. These require ongoing monitoring or polling. Terminal States: Settled, Failed, Refunded. Once a transaction hits a terminal state, the workflow is complete operationally, but the Reconciliation workflow begins. The Recon Handshake: The Lifecycle Automation system pushes the final state to the Reconciliation Engine. The Engine then verifies that the bank statement matches this final state. If they match, the loop is closed.
