zai_payment 2.3.1 → 2.4.0

data/examples/items.md

@@ -17,6 +17,10 @@ This document provides examples of how to use the Items resource in the Zai Paym
 - [List Item Transactions](#list-item-transactions)
 - [List Item Batch Transactions](#list-item-batch-transactions)
 - [Show Item Status](#show-item-status)
+- [Make Payment](#make-payment)
+- [Make Async Payment](#make-async-payment)
+- [Cancel Item](#cancel-item)
+- [Refund Item](#refund-item)
 
 ## Setup
 
@@ -445,6 +449,409 @@ else
 end
 ```
 
+## Make Payment
+
+Process a payment for an item using a card account. This method charges the buyer's card and initiates the payment flow.
+
+### Basic Payment
+
+```ruby
+# Make a payment with just the required parameters
+response = items.make_payment(
+  "item-123",
+  account_id: "card_account-456"    # Required
+)
+
+if response.success?
+  item = response.data
+  puts "Payment initiated for item: #{item['id']}"
+  puts "State: #{item['state']}"
+  puts "Payment State: #{item['payment_state']}"
+else
+  puts "Payment failed: #{response.error_message}"
+end
+```
+
+### Payment with Device Information
+
+For enhanced fraud protection, include device and IP address information:
+
+```ruby
+response = items.make_payment(
+  "item-123",
+  account_id: "card_account-456",  # Required
+  device_id: "device_789",
+  ip_address: request.remote_ip    # In a Rails controller
+)
+
+if response.success?
+  puts "Payment processed with device tracking"
+end
+```
+
+### Payment with CVV
+
+Some card payments may require CVV verification:
+
+```ruby
+response = items.make_payment(
+  "item-123",
+  account_id: "card_account-456",  # Required
+  cvv: "123"                       # CVV from secure form
+)
+
+if response.success?
+  puts "Payment processed with CVV verification"
+end
+```
+
+### Payment with All Optional Parameters
+
+Maximum fraud protection with all available parameters:
+
+```ruby
+response = items.make_payment(
+  "item-123",
+  account_id: "card_account-456",  # Required
+  device_id: "device_789",
+  ip_address: "192.168.1.1",
+  cvv: "123",
+  merchant_phone: "+61412345678"
+)
+
+if response.success?
+  item = response.data
+  puts "Payment initiated successfully"
+  puts "Item State: #{item['state']}"
+  puts "Payment State: #{item['payment_state']}"
+  puts "Amount: #{item['amount']}"
+else
+  puts "Payment failed: #{response.error_message}"
+end
+```
+
+### Error Handling for Payments
+
+```ruby
+begin
+  response = items.make_payment(
+    "item-123",
+    account_id: "card_account-456"
+  )
+  
+  if response.success?
+    puts "Payment successful"
+  else
+    # Handle API errors
+    case response.status
+    when 422
+      puts "Validation error: #{response.error_message}"
+      # Common: Insufficient funds, card declined, etc.
+    when 404
+      puts "Item or card account not found"
+    when 401
+      puts "Authentication failed"
+    else
+      puts "Payment error: #{response.error_message}"
+    end
+  end
+rescue ZaiPayment::Errors::ValidationError => e
+  puts "Validation error: #{e.message}"
+  # Example: "account_id is required and cannot be blank"
+rescue ZaiPayment::Errors::NotFoundError => e
+  puts "Resource not found: #{e.message}"
+rescue ZaiPayment::Errors::ApiError => e
+  puts "API error: #{e.message}"
+end
+```
+
+### Real-World Payment Flow Example
+
+Complete example showing item creation through payment:
+
+```ruby
+require 'zai_payment'
+
+# Configure
+ZaiPayment.configure do |config|
+  config.client_id = ENV['ZAI_CLIENT_ID']
+  config.client_secret = ENV['ZAI_CLIENT_SECRET']
+  config.scope = ENV['ZAI_SCOPE']
+  config.environment = :prelive
+end
+
+items = ZaiPayment.items
+
+# Step 1: Create an item
+create_response = items.create(
+  name: "Product Purchase",
+  amount: 10000,  # $100.00
+  payment_type: 2,
+  buyer_id: "buyer-123",
+  seller_id: "seller-456",
+  description: "Purchase of premium widget"
+)
+
+if create_response.success?
+  item_id = create_response.data['id']
+  puts "✓ Item created: #{item_id}"
+  
+  # Step 2: Make the payment
+  payment_response = items.make_payment(
+    item_id,
+    account_id: "card_account-789",  # Buyer's card account (Required)
+    ip_address: "192.168.1.1",
+    device_id: "device_abc123"
+  )
+  
+  if payment_response.success?
+    puts "✓ Payment initiated"
+    puts "  State: #{payment_response.data['state']}"
+    puts "  Payment State: #{payment_response.data['payment_state']}"
+    
+    # Step 3: Check payment status
+    sleep 2  # Wait for processing
+    
+    status_response = items.show_status(item_id)
+    if status_response.success?
+      status = status_response.data
+      puts "✓ Current status:"
+      puts "  State: #{status['state']}"
+      puts "  Payment State: #{status['payment_state']}"
+    end
+  else
+    puts "✗ Payment failed: #{payment_response.error_message}"
+  end
+else
+  puts "✗ Item creation failed: #{create_response.error_message}"
+end
+```
+
+### Payment States
+
+After calling `make_payment`, the item will go through several states:
+
+| State | Description |
+|-------|-------------|
+| `payment_pending` | Payment has been initiated |
+| `payment_processing` | Card is being charged |
+| `completed` | Payment successful, funds held in escrow |
+| `payment_held` | Payment succeeded but held for review |
+| `payment_failed` | Payment failed (card declined, insufficient funds, etc.) |
+
+### Webhook Integration
+
+After making a payment, listen for webhook events to track the payment status:
+
+```ruby
+# In your webhook handler
+def handle_transaction_webhook(payload)
+  if payload['type'] == 'payment' && payload['status'] == 'successful'
+    item_id = payload['related_items'].first
+    puts "Payment successful for item: #{item_id}"
+    
+    # Update your database
+    Order.find_by(zai_item_id: item_id).update(status: 'paid')
+  elsif payload['status'] == 'failed'
+    puts "Payment failed: #{payload['failure_reason']}"
+  end
+end
+```
+
+## Authorize Payment
+
+Authorize a payment without immediately capturing funds. This is useful for pre-authorization scenarios where you want to verify the card and hold funds before completing the transaction.
+
+### Basic Authorization
+
+```ruby
+# Authorize a payment with required parameters
+response = items.authorize_payment(
+  "item-123",
+  account_id: "card_account-456"    # Required
+)
+
+if response.success?
+  item = response.data
+  puts "Payment authorized for item: #{item['id']}"
+  puts "State: #{item['state']}"
+  puts "Payment State: #{item['payment_state']}"
+else
+  puts "Authorization failed: #{response.error_message}"
+end
+```
+
+### Authorization with CVV
+
+For additional security, include CVV verification:
+
+```ruby
+response = items.authorize_payment(
+  "item-123",
+  account_id: "card_account-456",  # Required
+  cvv: "123"                       # CVV from secure form
+)
+
+if response.success?
+  puts "Payment authorized with CVV verification"
+end
+```
+
+### Authorization with All Optional Parameters
+
+```ruby
+response = items.authorize_payment(
+  "item-123",
+  account_id: "card_account-456",  # Required
+  cvv: "123",
+  merchant_phone: "+61412345678"
+)
+
+if response.success?
+  item = response.data
+  puts "Payment authorized successfully"
+  puts "Item State: #{item['state']}"
+  puts "Payment State: #{item['payment_state']}"
+  puts "Amount: #{item['amount']}"
+else
+  puts "Authorization failed: #{response.error_message}"
+end
+```
+
+### Error Handling for Authorization
+
+```ruby
+begin
+  response = items.authorize_payment(
+    "item-123",
+    account_id: "card_account-456"
+  )
+  
+  if response.success?
+    puts "Authorization successful"
+  else
+    # Handle API errors
+    case response.status
+    when 422
+      puts "Validation error: #{response.error_message}"
+      # Common: Invalid card, card declined, etc.
+    when 404
+      puts "Item or card account not found"
+    when 401
+      puts "Authentication failed"
+    else
+      puts "Authorization error: #{response.error_message}"
+    end
+  end
+rescue ZaiPayment::Errors::ValidationError => e
+  puts "Validation error: #{e.message}"
+  # Example: "account_id is required and cannot be blank"
+rescue ZaiPayment::Errors::NotFoundError => e
+  puts "Resource not found: #{e.message}"
+rescue ZaiPayment::Errors::ApiError => e
+  puts "API error: #{e.message}"
+end
+```
+
+### Real-World Authorization Flow Example
+
+Complete example showing item creation through authorization:
+
+```ruby
+require 'zai_payment'
+
+# Configure
+ZaiPayment.configure do |config|
+  config.client_id = ENV['ZAI_CLIENT_ID']
+  config.client_secret = ENV['ZAI_CLIENT_SECRET']
+  config.scope = ENV['ZAI_SCOPE']
+  config.environment = :prelive
+end
+
+items = ZaiPayment.items
+
+# Step 1: Create an item
+create_response = items.create(
+  name: "Hotel Reservation",
+  amount: 50000,  # $500.00
+  payment_type: 2,
+  buyer_id: "buyer-123",
+  seller_id: "seller-456",
+  description: "Hotel booking - Hold authorization"
+)
+
+if create_response.success?
+  item_id = create_response.data['id']
+  puts "✓ Item created: #{item_id}"
+  
+  # Step 2: Authorize the payment (hold funds without capturing)
+  auth_response = items.authorize_payment(
+    item_id,
+    account_id: "card_account-789",
+    cvv: "123",
+    merchant_phone: "+61412345678"
+  )
+  
+  if auth_response.success?
+    puts "✓ Payment authorized (funds on hold)"
+    puts "  State: #{auth_response.data['state']}"
+    puts "  Payment State: #{auth_response.data['payment_state']}"
+    
+    # Step 3: Check authorization status
+    status_response = items.show_status(item_id)
+    if status_response.success?
+      status = status_response.data
+      puts "✓ Current status:"
+      puts "  State: #{status['state']}"
+      puts "  Payment State: #{status['payment_state']}"
+    end
+    
+    # Note: Funds are now held. You would later either:
+    # - Capture the payment (via make_payment or complete the item)
+    # - Cancel the authorization (via cancel)
+  else
+    puts "✗ Authorization failed: #{auth_response.error_message}"
+  end
+else
+  puts "✗ Item creation failed: #{create_response.error_message}"
+end
+```
+
+### Authorization States
+
+After calling `authorize_payment`, the item will go through several states:
+
+| State | Description |
+|-------|-------------|
+| `payment_authorized` | Payment has been authorized, funds are on hold |
+| `payment_held` | Payment authorized but held for review |
+| `authorization_failed` | Authorization failed (card declined, insufficient funds, etc.) |
+
+**Important Notes:**
+- Authorized funds are typically held for 7 days before being automatically released
+- To complete the transaction, you need to capture the payment separately
+- You can cancel an authorization to release the held funds immediately
+- Not all payment processors support separate authorization and capture
+
+### Webhook Integration
+
+After authorizing a payment, listen for webhook events:
+
+```ruby
+# In your webhook handler
+def handle_authorization_webhook(payload)
+  if payload['type'] == 'authorization' && payload['status'] == 'successful'
+    item_id = payload['related_items'].first
+    puts "Payment authorized for item: #{item_id}"
+    
+    # Update your database
+    Order.find_by(zai_item_id: item_id).update(status: 'authorized')
+  elsif payload['status'] == 'failed'
+    puts "Authorization failed: #{payload['failure_reason']}"
+  end
+end
+```
+
 ## Complete Workflow Example
 
 Here's a complete example of creating an item and performing various operations on it:
@@ -554,6 +961,1711 @@ else
 end
 ```
 
+## Capture Payment
+
+Capture a previously authorized payment to complete the transaction. This is the second step in the authorize → capture workflow, allowing you to finalize a payment after authorization.
+
+### Basic Capture (Full Amount)
+
+Capture the full authorized amount:
+
+```ruby
+response = items.capture_payment("item-123")
+
+if response.success?
+  item = response.data
+  puts "Payment captured successfully"
+  puts "Item ID: #{item['id']}"
+  puts "Amount: $#{item['amount'] / 100.0}"
+  puts "State: #{item['state']}"
+  puts "Payment State: #{item['payment_state']}"
+else
+  puts "Capture failed: #{response.error_message}"
+end
+```
+
+### Partial Capture
+
+Capture only a portion of the authorized amount:
+
+```ruby
+# Capture $50 of a $100 authorization
+response = items.capture_payment("item-123", amount: 5000)
+
+if response.success?
+  item = response.data
+  puts "Partial payment captured: $#{item['amount'] / 100.0}"
+  puts "State: #{item['state']}"
+  puts "Payment State: #{item['payment_state']}"
+else
+  puts "Capture failed: #{response.error_message}"
+end
+```
+
+### Capture with Error Handling
+
+```ruby
+begin
+  response = items.capture_payment("item-123", amount: 10_000)
+  
+  if response.success?
+    item = response.data
+    puts "✓ Payment captured: #{item['id']}"
+    puts "  Amount: $#{item['amount'] / 100.0}"
+    puts "  State: #{item['state']}"
+    puts "  Payment State: #{item['payment_state']}"
+  else
+    # Handle API errors
+    case response.status
+    when 422
+      puts "Cannot capture: #{response.error_message}"
+      # Common: Payment not authorized, authorization expired, or invalid amount
+    when 404
+      puts "Item not found"
+    when 401
+      puts "Authentication failed"
+    else
+      puts "Capture error: #{response.error_message}"
+    end
+  end
+rescue ZaiPayment::Errors::ValidationError => e
+  puts "Validation error: #{e.message}"
+rescue ZaiPayment::Errors::NotFoundError => e
+  puts "Item not found: #{e.message}"
+rescue ZaiPayment::Errors::ApiError => e
+  puts "API error: #{e.message}"
+end
+```
+
+### Capture with Status Check
+
+Check authorization status before attempting to capture:
+
+```ruby
+# Check current status
+status_response = items.show_status("item-123")
+
+if status_response.success?
+  status = status_response.data
+  payment_state = status['payment_state']
+  
+  puts "Current payment state: #{payment_state}"
+  
+  # Only capture if payment is authorized
+  if payment_state == 'authorized' || payment_state == 'payment_authorized'
+    capture_response = items.capture_payment("item-123")
+    
+    if capture_response.success?
+      puts "✓ Payment captured successfully"
+    else
+      puts "✗ Capture failed: #{capture_response.error_message}"
+    end
+  else
+    puts "Payment cannot be captured - current state: #{payment_state}"
+  end
+end
+```
+
+### Complete Authorization and Capture Workflow
+
+Full example demonstrating the two-step payment process:
+
+```ruby
+# Step 1: Authorize the payment
+puts "Step 1: Authorizing payment..."
+auth_response = items.authorize_payment(
+  "item-123",
+  account_id: "card_account-456",
+  cvv: "123"
+)
+
+if auth_response.success?
+  puts "✓ Payment authorized"
+  auth_data = auth_response.data
+  puts "  Item ID: #{auth_data['id']}"
+  puts "  Amount: $#{auth_data['amount'] / 100.0}"
+  puts "  State: #{auth_data['state']}"
+  
+  # Step 2: Verify authorization status
+  puts "\nStep 2: Verifying authorization..."
+  status_response = items.show_status("item-123")
+  
+  if status_response.success?
+    status = status_response.data
+    puts "✓ Status verified"
+    puts "  Payment State: #{status['payment_state']}"
+    
+    # Step 3: Capture the payment (can be done immediately or later)
+    puts "\nStep 3: Capturing payment..."
+    
+    # Wait a moment (optional - simulate real-world delay)
+    sleep 1
+    
+    capture_response = items.capture_payment("item-123")
+    
+    if capture_response.success?
+      capture_data = capture_response.data
+      puts "✓ Payment captured successfully"
+      puts "  Item ID: #{capture_data['id']}"
+      puts "  Final State: #{capture_data['state']}"
+      puts "  Final Payment State: #{capture_data['payment_state']}"
+    else
+      puts "✗ Capture failed: #{capture_response.error_message}"
+    end
+  else
+    puts "✗ Status check failed: #{status_response.error_message}"
+  end
+else
+  puts "✗ Authorization failed: #{auth_response.error_message}"
+end
+```
+
+### Capture with Retry Logic
+
+Implement retry logic for transient errors:
+
+```ruby
+def capture_payment_with_retry(item_id, amount: nil, max_retries: 3)
+  retries = 0
+  
+  begin
+    response = items.capture_payment(item_id, amount: amount)
+    
+    if response.success?
+      puts "✓ Payment captured successfully"
+      return response
+    elsif response.status == 422
+      # Validation error - don't retry
+      puts "✗ Capture failed: #{response.error_message}"
+      return response
+    else
+      # Other errors - maybe retry
+      raise "Capture error: #{response.error_message}"
+    end
+    
+  rescue => e
+    retries += 1
+    
+    if retries < max_retries
+      puts "⚠ Capture attempt #{retries} failed: #{e.message}"
+      puts "  Retrying in #{retries * 2} seconds..."
+      sleep(retries * 2)
+      retry
+    else
+      puts "✗ Capture failed after #{max_retries} attempts"
+      raise e
+    end
+  end
+end
+
+# Usage
+begin
+  response = capture_payment_with_retry("item-123", amount: 10_000)
+  puts "Final state: #{response.data['payment_state']}" if response.success?
+rescue => e
+  puts "Capture ultimately failed: #{e.message}"
+end
+```
+
+### Real-World Capture Flow Example
+
+A complete example showing how to handle the authorize and capture workflow in a real application:
+
+```ruby
+class PaymentProcessor
+  def initialize
+    @items = ZaiPayment.items
+  end
+  
+  def process_two_step_payment(order)
+    # Step 1: Authorize
+    puts "Processing order ##{order[:id]} - Amount: $#{order[:amount] / 100.0}"
+    
+    auth_response = authorize_payment(order)
+    return { success: false, error: "Authorization failed" } unless auth_response
+    
+    # Step 2: Perform additional checks (inventory, fraud, etc.)
+    return { success: false, error: "Fraud check failed" } unless verify_order(order)
+    
+    # Step 3: Capture
+    capture_response = capture_payment(order[:item_id], order[:capture_amount])
+    return { success: false, error: "Capture failed" } unless capture_response
+    
+    # Step 4: Update order and notify
+    finalize_order(order, capture_response)
+    
+    { success: true, data: capture_response.data }
+  end
+  
+  private
+  
+  def authorize_payment(order)
+    puts "→ Authorizing payment..."
+    
+    response = @items.authorize_payment(
+      order[:item_id],
+      account_id: order[:account_id],
+      cvv: order[:cvv]
+    )
+    
+    if response.success?
+      puts "✓ Payment authorized: #{order[:item_id]}"
+      response
+    else
+      puts "✗ Authorization failed: #{response.error_message}"
+      nil
+    end
+  end
+  
+  def verify_order(order)
+    puts "→ Verifying order..."
+    
+    # Check inventory
+    return false unless check_inventory(order[:items])
+    
+    # Check fraud score
+    return false unless check_fraud_score(order[:buyer_id])
+    
+    puts "✓ Order verified"
+    true
+  end
+  
+  def capture_payment(item_id, amount = nil)
+    puts "→ Capturing payment..."
+    
+    response = @items.capture_payment(item_id, amount: amount)
+    
+    if response.success?
+      puts "✓ Payment captured: #{item_id}"
+      response
+    else
+      puts "✗ Capture failed: #{response.error_message}"
+      nil
+    end
+  end
+  
+  def finalize_order(order, capture_response)
+    puts "→ Finalizing order..."
+    
+    # Update order status in database
+    # update_order_status(order[:id], 'paid')
+    
+    # Send confirmation email
+    # send_confirmation_email(order[:buyer_email])
+    
+    # Update inventory
+    # reduce_inventory(order[:items])
+    
+    puts "✓ Order finalized: ##{order[:id]}"
+  end
+  
+  def check_inventory(items)
+    # Implement inventory check
+    true
+  end
+  
+  def check_fraud_score(buyer_id)
+    # Implement fraud check
+    true
+  end
+end
+
+# Usage
+processor = PaymentProcessor.new
+
+order = {
+  id: 12345,
+  item_id: "item-abc123",
+  account_id: "card_account-456",
+  cvv: "123",
+  amount: 10_000,
+  capture_amount: 10_000, # Can be less for partial capture
+  buyer_id: "buyer-789",
+  buyer_email: "customer@example.com",
+  items: ["product-1", "product-2"]
+}
+
+result = processor.process_two_step_payment(order)
+
+if result[:success]
+  puts "\n✓ Payment completed successfully!"
+  puts "  Item: #{result[:data]['id']}"
+  puts "  State: #{result[:data]['payment_state']}"
+else
+  puts "\n✗ Payment failed: #{result[:error]}"
+end
+```
+
+### Capture States and Conditions
+
+Payments can be captured when in these states:
+
+| State | Can Capture? | Description |
+|-------|-------------|-------------|
+| `authorized` | ✓ Yes | Payment authorized and ready to capture |
+| `payment_authorized` | ✓ Yes | Payment authorized and ready to capture |
+| `pending` | ✗ No | Payment not authorized yet |
+| `payment_pending` | ✗ No | Payment processing, not authorized |
+| `completed` | ✗ No | Already captured |
+| `payment_deposited` | ✗ No | Already captured and deposited |
+| `cancelled` | ✗ No | Authorization cancelled |
+| `refunded` | ✗ No | Payment refunded |
+
+### Best Practices for Capture
+
+1. **Timely Captures**: Capture authorized payments within 7 days (typical authorization expiration)
+2. **Status Verification**: Always check payment state before attempting capture
+3. **Partial Captures**: Use for order adjustments or split fulfillment
+4. **Error Handling**: Implement robust error handling and retry logic
+5. **Logging**: Log all authorization and capture attempts for audit trails
+6. **Notifications**: Notify customers when payment is captured
+7. **Timeouts**: Set appropriate timeout values for capture requests
+
+### Common Capture Errors
+
+| Error | Cause | Solution |
+|-------|-------|----------|
+| "Payment not authorized" | Trying to capture non-authorized payment | Authorize first, then capture |
+| "Authorization expired" | Authorization older than 7 days | Create new item and authorize again |
+| "Amount exceeds authorized amount" | Capture amount > authorized amount | Reduce capture amount or re-authorize |
+| "Item not found" | Invalid item ID | Verify item ID is correct |
+| "Payment already captured" | Duplicate capture attempt | Check payment state before capture |
+
+### Capture Integration with Rails
+
+#### In a Controller
+
+```ruby
+class PaymentsController < ApplicationController
+  def capture
+    @order = Order.find(params[:order_id])
+    
+    # Verify order can be captured
+    unless @order.payment_state == 'authorized'
+      flash[:error] = "Payment not authorized"
+      redirect_to @order and return
+    end
+    
+    # Capture the payment
+    response = ZaiPayment.items.capture_payment(
+      @order.zai_item_id,
+      amount: params[:amount] # Optional for partial capture
+    )
+    
+    if response.success?
+      @order.update(
+        payment_state: response.data['payment_state'],
+        captured_at: Time.current
+      )
+      
+      flash[:success] = "Payment captured successfully"
+      redirect_to @order
+    else
+      flash[:error] = "Capture failed: #{response.error_message}"
+      render :show
+    end
+  end
+end
+```
+
+#### In a Background Job
+
+```ruby
+class CapturePaymentJob < ApplicationJob
+  queue_as :payments
+  
+  def perform(order_id)
+    order = Order.find(order_id)
+    
+    # Check if order is ready to capture
+    return unless order.ready_to_capture?
+    
+    # Capture the payment
+    response = ZaiPayment.items.capture_payment(order.zai_item_id)
+    
+    if response.success?
+      order.update(
+        payment_state: 'captured',
+        captured_at: Time.current
+      )
+      
+      # Send confirmation email
+      OrderMailer.payment_captured(order).deliver_later
+      
+      # Update inventory
+      order.reduce_inventory!
+    else
+      # Log error and retry or alert
+      Rails.logger.error("Capture failed for order #{order_id}: #{response.error_message}")
+      
+      # Retry if appropriate
+      raise "Capture failed" if response.status >= 500
+    end
+  end
+end
+```
+
+## Make Async Payment
+
+Initiate a card payment with 3D Secure 2.0 (3DS2) authentication support. This endpoint initiates the payment process and returns a `payment_token` that is required for initialising the 3DS2 web component on the client side.
+
+This method is specifically designed for payments that require 3D Secure verification, providing enhanced security for card transactions.
+
+### Basic Async Payment
+
+```ruby
+# Make an async payment with just the required parameters
+response = items.make_payment_async(
+  "item-123",
+  account_id: "card_account-456"  # Required
+)
+
+if response.success?
+  payment_id = response.data['payment_id']
+  payment_token = response.data['payment_token']
+  item = response.data['items']
+  
+  puts "Payment initiated: #{payment_id}"
+  puts "Payment token for 3DS2: #{payment_token}"
+  puts "Item state: #{item['state']}"
+  puts "Amount: $#{item['amount'] / 100.0}"
+  
+  # Use the payment_token to initialise the 3DS2 web component
+  # on the client side (JavaScript)
+else
+  puts "Payment failed: #{response.error_message}"
+end
+```
+
+### Async Payment with 3DS Challenge
+
+To explicitly request a 3D Secure challenge:
+
+```ruby
+response = items.make_payment_async(
+  "item-123",
+  account_id: "card_account-456",
+  request_three_d_secure: "challenge"
+)
+
+if response.success?
+  payment_token = response.data['payment_token']
+  payment_id = response.data['payment_id']
+  
+  puts "Payment initiated with 3DS challenge: #{payment_id}"
+  puts "Payment token: #{payment_token}"
+  
+  # Send the payment_token to the client to initialise 3DS2 component
+  # The component will display the 3DS challenge to the user
+else
+  puts "Payment initiation failed: #{response.error_message}"
+end
+```
+
+### Automatic 3DS Determination
+
+When using the default 'automatic' mode, the system determines whether 3DS is required:
+
+```ruby
+response = items.make_payment_async(
+  "item-123",
+  account_id: "card_account-456",
+  request_three_d_secure: "automatic"  # This is the default
+)
+
+if response.success?
+  item = response.data['items']
+  payment_token = response.data['payment_token']
+  
+  puts "3DS handled automatically"
+  puts "Item state: #{item['state']}"
+  
+  # The payment_token will be provided if 3DS is required
+  if payment_token && !payment_token.empty?
+    puts "3DS verification required - use token: #{payment_token}"
+    # Send token to client for 3DS2 component initialisation
+  else
+    puts "3DS verification not required - payment processed"
+  end
+end
+```
+
+### Complete Rails Example with 3DS2
+
+Complete example showing how to implement async payment in a Rails application:
+
+```ruby
+# app/controllers/payments_controller.rb
+class PaymentsController < ApplicationController
+  def create_async_payment
+    items = ZaiPayment.items
+    
+    # Step 1: Initiate async payment
+    response = items.make_payment_async(
+      params[:item_id],
+      account_id: params[:account_id],
+      request_three_d_secure: "automatic"
+    )
+    
+    if response.success?
+      payment_id = response.data['payment_id']
+      payment_token = response.data['payment_token']
+      item_data = response.data['items']
+      
+      # Store payment_id for tracking
+      @payment = Payment.create!(
+        zai_payment_id: payment_id,
+        zai_item_id: item_data['id'],
+        amount: item_data['amount'],
+        state: item_data['state'],
+        payment_token: payment_token
+      )
+      
+      # Return payment_token to client for 3DS2 initialisation
+      render json: {
+        success: true,
+        payment_id: payment_id,
+        payment_token: payment_token,
+        requires_3ds: payment_token.present?
+      }
+    else
+      render json: {
+        success: false,
+        error: response.error_message
+      }, status: :unprocessable_entity
+    end
+  end
+end
+```
+
+```javascript
+// app/javascript/payments/three_d_secure.js
+// Client-side 3DS2 component initialisation
+
+async function initiateAsyncPayment(itemId, accountId) {
+  try {
+    // Call your Rails backend to initiate the payment
+    const response = await fetch('/payments/create_async', {
+      method: 'POST',
+      headers: {
+        'Content-Type': 'application/json',
+        'X-CSRF-Token': document.querySelector('[name="csrf-token"]').content
+      },
+      body: JSON.stringify({
+        item_id: itemId,
+        account_id: accountId
+      })
+    });
+    
+    const data = await response.json();
+    
+    if (data.success && data.requires_3ds) {
+      // Initialize 3DS2 component with the payment_token
+      await initialize3DS2Component(data.payment_token);
+    } else if (data.success) {
+      // Payment completed without 3DS
+      window.location.href = '/payments/success';
+    } else {
+      alert('Payment failed: ' + data.error);
+    }
+  } catch (error) {
+    console.error('Payment error:', error);
+    alert('Payment failed. Please try again.');
+  }
+}
+
+async function initialize3DS2Component(paymentToken) {
+  // Use Zai's 3DS2 SDK to initialize the component
+  // This is a simplified example - refer to Zai documentation for actual implementation
+  
+  const threeDSComponent = new ZaiThreeDSecure({
+    paymentToken: paymentToken,
+    onSuccess: function(result) {
+      console.log('3DS verification successful', result);
+      window.location.href = '/payments/success';
+    },
+    onError: function(error) {
+      console.error('3DS verification failed', error);
+      alert('Payment verification failed. Please try again.');
+    }
+  });
+  
+  threeDSComponent.mount('#three-ds-container');
+}
+```
+
+### Error Handling for Async Payments
+
+```ruby
+begin
+  response = items.make_payment_async(
+    "item-123",
+    account_id: "card_account-456"
+  )
+  
+  if response.success?
+    payment_id = response.data['payment_id']
+    payment_token = response.data['payment_token']
+    
+    puts "✓ Payment initiated: #{payment_id}"
+    
+    if payment_token
+      puts "  3DS verification required"
+      puts "  Token: #{payment_token}"
+    else
+      puts "  3DS not required, payment processing"
+    end
+  else
+    # Handle API errors
+    case response.status
+    when 422
+      puts "Validation error: #{response.error_message}"
+      # Common: Invalid account, insufficient funds
+    when 404
+      puts "Item or account not found"
+    when 401
+      puts "Authentication failed"
+    else
+      puts "Payment error: #{response.error_message}"
+    end
+  end
+rescue ZaiPayment::Errors::ValidationError => e
+  puts "Validation error: #{e.message}"
+  # Example: "account_id is required and cannot be blank"
+rescue ZaiPayment::Errors::NotFoundError => e
+  puts "Resource not found: #{e.message}"
+rescue ZaiPayment::Errors::BadRequestError => e
+  puts "Bad request: #{e.message}"
+rescue ZaiPayment::Errors::ApiError => e
+  puts "API error: #{e.message}"
+end
+```
+
+### Full E-commerce Flow with Async Payment
+
+Complete example showing item creation through async payment with 3DS:
+
+```ruby
+require 'zai_payment'
+
+# Configure
+ZaiPayment.configure do |config|
+  config.client_id = ENV['ZAI_CLIENT_ID']
+  config.client_secret = ENV['ZAI_CLIENT_SECRET']
+  config.scope = ENV['ZAI_SCOPE']
+  config.environment = :prelive
+end
+
+items = ZaiPayment.items
+
+# Step 1: Create an item
+create_response = items.create(
+  name: "Premium Product with 3DS",
+  amount: 25000,  # $250.00
+  payment_type: 2,
+  buyer_id: "buyer-123",
+  seller_id: "seller-456",
+  description: "High-value product requiring 3DS verification"
+)
+
+if create_response.success?
+  item_id = create_response.data['id']
+  puts "✓ Item created: #{item_id}"
+  
+  # Step 2: Initiate async payment with 3DS
+  payment_response = items.make_payment_async(
+    item_id,
+    account_id: "card_account-789",
+    request_three_d_secure: "automatic"
+  )
+  
+  if payment_response.success?
+    payment_id = payment_response.data['payment_id']
+    payment_token = payment_response.data['payment_token']
+    item_data = payment_response.data['items']
+    
+    puts "✓ Async payment initiated: #{payment_id}"
+    puts "  Item state: #{item_data['state']}"
+    puts "  Amount: $#{item_data['amount'] / 100.0}"
+    
+    if payment_token && !payment_token.empty?
+      puts "  3DS verification required"
+      puts "  Payment token: #{payment_token}"
+      puts "  → Send this token to client for 3DS2 component"
+      
+      # In a real application:
+      # 1. Send payment_token to the client
+      # 2. Client initializes 3DS2 component
+      # 3. User completes 3DS challenge
+      # 4. Listen for webhook to confirm payment status
+    else
+      puts "  3DS not required - payment processing automatically"
+      
+      # Step 3: Monitor payment via webhook or polling
+      # In production, use webhooks for real-time updates
+    end
+  else
+    puts "✗ Payment failed: #{payment_response.error_message}"
+  end
+else
+  puts "✗ Item creation failed: #{create_response.error_message}"
+end
+```
+
+### Understanding the Response
+
+The `make_payment_async` response includes several important fields:
+
+```ruby
+response = items.make_payment_async("item-123", account_id: "account-456")
+
+if response.success?
+  # Top-level payment information
+  payment_id = response.data['payment_id']           # Unique payment identifier
+  account_id = response.data['account_id']           # Account used for payment
+  payment_token = response.data['payment_token']     # Token for 3DS2 initialization
+  
+  # Item details
+  item = response.data['items']
+  item_id = item['id']                               # Item/transaction ID
+  state = item['state']                              # Current state (e.g., 'pending')
+  amount = item['amount']                            # Amount in cents
+  currency = item['currency']                        # Currency code (e.g., 'AUD')
+  payment_method = item['payment_method']            # Payment method used
+  
+  # Related resources
+  related = item['related']
+  buyer_id = related['buyers']                       # Buyer user ID
+  seller_id = related['sellers']                     # Seller user ID
+  
+  # Useful links
+  links = item['links']
+  status_url = links['status']                       # URL to check status
+  transactions_url = links['transactions']           # URL for transactions
+end
+```
+
+### 3DS Preference Options
+
+The `request_three_d_secure` parameter accepts three values:
+
+| Value | Description | Use Case |
+|-------|-------------|----------|
+| `'automatic'` | System determines if 3DS is required (default) | Recommended for most cases - balances security and UX |
+| `'challenge'` | Always request 3DS challenge | High-value transactions, compliance requirements |
+| `'any'` | Request 3DS regardless of challenge flow | Maximum security, regulatory requirements |
+
+```ruby
+# Automatic (recommended)
+items.make_payment_async("item-123", 
+  account_id: "account-456",
+  request_three_d_secure: "automatic"
+)
+
+# Force challenge for high-value transactions
+items.make_payment_async("item-123", 
+  account_id: "account-456",
+  request_three_d_secure: "challenge"
+)
+
+# Maximum security
+items.make_payment_async("item-123", 
+  account_id: "account-456",
+  request_three_d_secure: "any"
+)
+```
+
+### Important Notes
+
+1. **Payment Token**: The `payment_token` must be sent to the client to initialize the 3DS2 web component
+2. **Webhooks**: After 3DS authentication completes, listen for webhooks to get the final payment status
+3. **Timeout**: 3DS challenges typically expire after 10-15 minutes of inactivity
+4. **Failed Authentication**: If 3DS verification fails, the payment will be automatically cancelled
+5. **Testing**: Use Zai test cards to simulate different 3DS scenarios in prelive environment
+
+### Webhook Integration
+
+After initiating an async payment, monitor webhooks for status updates:
+
+```ruby
+# In your webhook handler (e.g., Rails controller)
+def handle_payment_webhook
+  # Verify webhook signature first
+  webhooks = ZaiPayment.webhooks
+  
+  begin
+    if webhooks.verify_signature(request.body.read, request.headers['X-Signature'])
+      payload = JSON.parse(request.body.read)
+      
+      case payload['type']
+      when 'transaction'
+        if payload['status'] == 'successful'
+          payment_id = payload['payment_id']
+          item_id = payload['item_id']
+          
+          # Update your database
+          payment = Payment.find_by(zai_payment_id: payment_id)
+          payment.update!(status: 'completed', completed_at: Time.current)
+          
+          # Send confirmation email, fulfill order, etc.
+          OrderFulfillmentJob.perform_later(payment.order_id)
+          
+          puts "✓ Payment completed: #{payment_id}"
+        elsif payload['status'] == 'failed'
+          # Handle failed payment
+          payment = Payment.find_by(zai_payment_id: payload['payment_id'])
+          payment.update!(status: 'failed', failure_reason: payload['message'])
+          
+          # Notify customer
+          PaymentFailureMailer.notify(payment.user).deliver_later
+        end
+      end
+      
+      head :ok
+    else
+      head :unauthorized
+    end
+  rescue => e
+    Rails.logger.error "Webhook error: #{e.message}"
+    head :internal_server_error
+  end
+end
+```
+
+## Cancel Item
+
+Cancel an existing item/payment. This operation is typically used to cancel a pending payment before it has been processed or completed.
+
+### Basic Cancel
+
+```ruby
+response = items.cancel("item-123")
+
+if response.success?
+  item = response.data
+  puts "Item cancelled successfully"
+  puts "Item ID: #{item['id']}"
+  puts "State: #{item['state']}"
+  puts "Payment State: #{item['payment_state']}"
+else
+  puts "Cancel failed: #{response.error_message}"
+end
+```
+
+### Cancel with Error Handling
+
+```ruby
+begin
+  response = items.cancel("item-123")
+  
+  if response.success?
+    item = response.data
+    puts "✓ Item cancelled: #{item['id']}"
+    puts "  State: #{item['state']}"
+    puts "  Payment State: #{item['payment_state']}"
+  else
+    # Handle API errors
+    case response.status
+    when 422
+      puts "Cannot cancel: #{response.error_message}"
+      # Common: Item already completed or in a state that can't be cancelled
+    when 404
+      puts "Item not found"
+    when 401
+      puts "Authentication failed"
+    else
+      puts "Cancellation error: #{response.error_message}"
+    end
+  end
+rescue ZaiPayment::Errors::ValidationError => e
+  puts "Validation error: #{e.message}"
+rescue ZaiPayment::Errors::NotFoundError => e
+  puts "Item not found: #{e.message}"
+rescue ZaiPayment::Errors::ApiError => e
+  puts "API error: #{e.message}"
+end
+```
+
+### Cancel with Status Check
+
+Check item status before attempting to cancel:
+
+```ruby
+# Check current status
+status_response = items.show_status("item-123")
+
+if status_response.success?
+  status = status_response.data
+  current_state = status['state']
+  payment_state = status['payment_state']
+  
+  puts "Current state: #{current_state}"
+  puts "Payment state: #{payment_state}"
+  
+  # Only cancel if in a cancellable state
+  if ['pending', 'payment_pending'].include?(current_state)
+    cancel_response = items.cancel("item-123")
+    
+    if cancel_response.success?
+      puts "✓ Item cancelled successfully"
+    else
+      puts "✗ Cancel failed: #{cancel_response.error_message}"
+    end
+  else
+    puts "Item cannot be cancelled - current state: #{current_state}"
+  end
+end
+```
+
+### Real-World Cancel Flow Example
+
+Complete example showing item creation, payment, and cancellation:
+
+```ruby
+require 'zai_payment'
+
+# Configure
+ZaiPayment.configure do |config|
+  config.client_id = ENV['ZAI_CLIENT_ID']
+  config.client_secret = ENV['ZAI_CLIENT_SECRET']
+  config.scope = ENV['ZAI_SCOPE']
+  config.environment = :prelive
+end
+
+items = ZaiPayment.items
+
+# Step 1: Create an item
+create_response = items.create(
+  name: "Product Purchase",
+  amount: 10000,  # $100.00
+  payment_type: 2,
+  buyer_id: "buyer-123",
+  seller_id: "seller-456",
+  description: "Purchase of premium widget"
+)
+
+if create_response.success?
+  item_id = create_response.data['id']
+  puts "✓ Item created: #{item_id}"
+  
+  # Step 2: Customer decides to cancel before payment
+  puts "\nCustomer requested cancellation..."
+  
+  # Step 3: Check if item can be cancelled
+  status_response = items.show_status(item_id)
+  
+  if status_response.success?
+    current_state = status_response.data['state']
+    puts "Current item state: #{current_state}"
+    
+    # Step 4: Cancel the item
+    if ['pending', 'payment_pending'].include?(current_state)
+      cancel_response = items.cancel(item_id)
+      
+      if cancel_response.success?
+        cancelled_item = cancel_response.data
+        puts "✓ Item cancelled successfully"
+        puts "  Final state: #{cancelled_item['state']}"
+        puts "  Payment state: #{cancelled_item['payment_state']}"
+        
+        # Notify customer
+        # CustomerMailer.order_cancelled(customer_email, item_id).deliver_later
+      else
+        puts "✗ Cancellation failed: #{cancel_response.error_message}"
+      end
+    else
+      puts "✗ Item cannot be cancelled - current state: #{current_state}"
+    end
+  end
+else
+  puts "✗ Item creation failed: #{create_response.error_message}"
+end
+```
+
+### Cancel States and Conditions
+
+Items can typically be cancelled when in these states:
+
+| State | Can Cancel? | Description |
+|-------|-------------|-------------|
+| `pending` | ✓ Yes | Item created but no payment initiated |
+| `payment_pending` | ✓ Yes | Payment initiated but not yet processed |
+| `payment_processing` | Maybe | Depends on payment processor |
+| `completed` | ✗ No | Payment completed, must refund instead |
+| `payment_held` | Maybe | May require admin approval |
+| `cancelled` | ✗ No | Already cancelled |
+| `refunded` | ✗ No | Already refunded |
+
+**Note:** If an item is already completed or funds have been disbursed, you cannot cancel it. In those cases, you may need to process a refund instead.
+
+## Refund Item
+
+Process a refund for a completed payment. This operation returns funds to the buyer and is typically used for customer returns, disputes, or service issues.
+
+### Basic Refund
+
+```ruby
+response = items.refund("item-123")
+
+if response.success?
+  item = response.data
+  puts "Item refunded successfully"
+  puts "Item ID: #{item['id']}"
+  puts "State: #{item['state']}"
+  puts "Payment State: #{item['payment_state']}"
+else
+  puts "Refund failed: #{response.error_message}"
+end
+```
+
+### Partial Refund
+
+Process a partial refund for a specific amount:
+
+```ruby
+# Refund $50.00 out of the original $100.00 transaction
+response = items.refund(
+  "item-123",
+  refund_amount: 5000  # Amount in cents
+)
+
+if response.success?
+  item = response.data
+  puts "Partial refund processed"
+  puts "Refund Amount: $50.00"
+  puts "State: #{item['state']}"
+else
+  puts "Partial refund failed: #{response.error_message}"
+end
+```
+
+### Refund with Message
+
+Provide a reason for the refund:
+
+```ruby
+response = items.refund(
+  "item-123",
+  refund_message: "Customer returned defective product"
+)
+
+if response.success?
+  puts "Refund processed with message"
+else
+  puts "Refund failed: #{response.error_message}"
+end
+```
+
+### Refund to Specific Account
+
+Specify which account to refund to:
+
+```ruby
+response = items.refund(
+  "item-123",
+  account_id: "account_789"
+)
+
+if response.success?
+  puts "Refund sent to specified account"
+else
+  puts "Refund failed: #{response.error_message}"
+end
+```
+
+### Refund with All Parameters
+
+Process a partial refund with a message and specific account:
+
+```ruby
+response = items.refund(
+  "item-123",
+  refund_amount: 5000,
+  refund_message: "Partial refund for shipping damage",
+  account_id: "account_789"
+)
+
+if response.success?
+  item = response.data
+  puts "✓ Partial refund processed"
+  puts "  Amount: $50.00"
+  puts "  Message: Partial refund for shipping damage"
+  puts "  State: #{item['state']}"
+  puts "  Payment State: #{item['payment_state']}"
+else
+  puts "✗ Refund failed: #{response.error_message}"
+end
+```
+
+### Refund with Error Handling
+
+```ruby
+begin
+  response = items.refund("item-123")
+  
+  if response.success?
+    item = response.data
+    puts "✓ Item refunded: #{item['id']}"
+    puts "  State: #{item['state']}"
+    puts "  Payment State: #{item['payment_state']}"
+  else
+    # Handle API errors
+    case response.status
+    when 422
+      puts "Cannot refund: #{response.error_message}"
+      # Common: Item already refunded, not in refundable state, etc.
+    when 404
+      puts "Item not found"
+    when 401
+      puts "Authentication failed"
+    else
+      puts "Refund error: #{response.error_message}"
+    end
+  end
+rescue ZaiPayment::Errors::ValidationError => e
+  puts "Validation error: #{e.message}"
+rescue ZaiPayment::Errors::NotFoundError => e
+  puts "Item not found: #{e.message}"
+rescue ZaiPayment::Errors::ApiError => e
+  puts "API error: #{e.message}"
+end
+```
+
+### Refund with Status Check
+
+Check item status before attempting to refund:
+
+```ruby
+# Check current status
+status_response = items.show_status("item-123")
+
+if status_response.success?
+  status = status_response.data
+  current_state = status['state']
+  payment_state = status['payment_state']
+  
+  puts "Current state: #{current_state}"
+  puts "Payment state: #{payment_state}"
+  
+  # Only refund if in a refundable state
+  if ['completed', 'payment_deposited', 'work_completed'].include?(payment_state)
+    refund_response = items.refund("item-123")
+    
+    if refund_response.success?
+      puts "✓ Item refunded successfully"
+    else
+      puts "✗ Refund failed: #{refund_response.error_message}"
+    end
+  else
+    puts "Item cannot be refunded - payment state: #{payment_state}"
+  end
+end
+```
+
+### Real-World Refund Flow Example
+
+Complete example showing item creation, payment, and refund:
+
+```ruby
+require 'zai_payment'
+
+# Configure
+ZaiPayment.configure do |config|
+  config.client_id = ENV['ZAI_CLIENT_ID']
+  config.client_secret = ENV['ZAI_CLIENT_SECRET']
+  config.scope = ENV['ZAI_SCOPE']
+  config.environment = :prelive
+end
+
+items = ZaiPayment.items
+
+# Step 1: Create an item
+create_response = items.create(
+  name: "Product Purchase",
+  amount: 10000,  # $100.00
+  payment_type: 2,
+  buyer_id: "buyer-123",
+  seller_id: "seller-456",
+  description: "Purchase of premium widget"
+)
+
+if create_response.success?
+  item_id = create_response.data['id']
+  puts "✓ Item created: #{item_id}"
+  
+  # Step 2: Make the payment
+  payment_response = items.make_payment(
+    item_id,
+    account_id: "card_account-789"
+  )
+  
+  if payment_response.success?
+    puts "✓ Payment processed"
+    
+    # Step 3: Customer requests refund
+    puts "\nCustomer requested refund..."
+    
+    # Wait for payment to complete
+    sleep 2
+    
+    # Step 4: Check if item can be refunded
+    status_response = items.show_status(item_id)
+    
+    if status_response.success?
+      payment_state = status_response.data['payment_state']
+      puts "Current payment state: #{payment_state}"
+      
+      # Step 5: Process the refund
+      if ['completed', 'payment_deposited'].include?(payment_state)
+        refund_response = items.refund(
+          item_id,
+          refund_message: "Customer return - changed mind"
+        )
+        
+        if refund_response.success?
+          refunded_item = refund_response.data
+          puts "✓ Refund processed successfully"
+          puts "  Final state: #{refunded_item['state']}"
+          puts "  Payment state: #{refunded_item['payment_state']}"
+          
+          # Notify customer
+          # CustomerMailer.refund_processed(customer_email, item_id).deliver_later
+        else
+          puts "✗ Refund failed: #{refund_response.error_message}"
+        end
+      else
+        puts "✗ Item cannot be refunded - payment state: #{payment_state}"
+      end
+    end
+  else
+    puts "✗ Payment failed: #{payment_response.error_message}"
+  end
+else
+  puts "✗ Item creation failed: #{create_response.error_message}"
+end
+```
+
+### Refund States and Conditions
+
+Items can typically be refunded when in these states:
+
+| State | Can Refund? | Description |
+|-------|-------------|-------------|
+| `pending` | ✗ No | Item not yet paid, cancel instead |
+| `payment_pending` | ✗ No | Payment not completed, cancel instead |
+| `completed` | ✓ Yes | Payment completed successfully |
+| `payment_deposited` | ✓ Yes | Payment received and deposited |
+| `work_completed` | ✓ Yes | Work completed, funds can be refunded |
+| `cancelled` | ✗ No | Already cancelled |
+| `refunded` | ✗ No | Already refunded |
+| `payment_held` | Maybe | May require admin approval |
+
+**Note:** Full refunds return the entire item amount. Partial refunds return a specified amount less than the total. Multiple partial refunds may be possible depending on your Zai configuration.
+
+### Integration with Rails - Refunds
+
+#### In a Controller
+
+```ruby
+class RefundsController < ApplicationController
+  def create
+    @order = Order.find(params[:order_id])
+    
+    # Ensure order belongs to current user or is admin
+    unless @order.user == current_user || current_user.admin?
+      redirect_to root_path, alert: 'Unauthorized'
+      return
+    end
+    
+    # Process refund in Zai
+    response = ZaiPayment.items.refund(
+      @order.zai_item_id,
+      refund_amount: params[:refund_amount]&.to_i,
+      refund_message: params[:refund_message]
+    )
+    
+    if response.success?
+      @order.update(
+        status: 'refunded',
+        refunded_at: Time.current,
+        refund_amount: params[:refund_amount]&.to_i,
+        refund_reason: params[:refund_message]
+      )
+      
+      redirect_to @order, notice: 'Refund processed successfully'
+    else
+      flash[:error] = "Cannot process refund: #{response.error_message}"
+      redirect_to @order
+    end
+  rescue ZaiPayment::Errors::ValidationError => e
+    flash[:error] = "Refund error: #{e.message}"
+    redirect_to @order
+  end
+end
+```
+
+#### In a Service Object
+
+```ruby
+class RefundService
+  def initialize(order, refund_params = {})
+    @order = order
+    @refund_amount = refund_params[:amount]
+    @refund_message = refund_params[:message]
+    @account_id = refund_params[:account_id]
+  end
+  
+  def process_refund
+    # Validate order is refundable
+    unless refundable?
+      return { success: false, error: 'Order cannot be refunded' }
+    end
+    
+    # Validate refund amount
+    if @refund_amount && @refund_amount > @order.total_amount
+      return { success: false, error: 'Refund amount exceeds order total' }
+    end
+    
+    # Process refund in Zai
+    response = ZaiPayment.items.refund(
+      @order.zai_item_id,
+      refund_amount: @refund_amount,
+      refund_message: @refund_message,
+      account_id: @account_id
+    )
+    
+    if response.success?
+      # Update local database
+      @order.update(
+        status: @refund_amount == @order.total_amount ? 'refunded' : 'partially_refunded',
+        zai_state: response.data['state'],
+        zai_payment_state: response.data['payment_state'],
+        refunded_at: Time.current,
+        refund_amount: @refund_amount || @order.total_amount,
+        refund_reason: @refund_message
+      )
+      
+      # Send notification
+      OrderMailer.refund_processed(@order).deliver_later
+      
+      # Log the refund
+      @order.refund_logs.create(
+        amount: @refund_amount || @order.total_amount,
+        reason: @refund_message,
+        processed_at: Time.current
+      )
+      
+      { success: true, order: @order }
+    else
+      { success: false, error: response.error_message }
+    end
+  rescue ZaiPayment::Errors::ApiError => e
+    { success: false, error: e.message }
+  end
+  
+  private
+  
+  def refundable?
+    # Check local status
+    return false unless @order.status.in?(['completed', 'paid'])
+    
+    # Check Zai status
+    status_response = ZaiPayment.items.show_status(@order.zai_item_id)
+    return false unless status_response.success?
+    
+    payment_state = status_response.data['payment_state']
+    payment_state.in?(['completed', 'payment_deposited', 'work_completed'])
+  rescue
+    false
+  end
+end
+
+# Usage:
+# service = RefundService.new(order, amount: 5000, message: 'Customer return')
+# result = service.process_refund
+# if result[:success]
+#   # Handle success
+# else
+#   # Handle error: result[:error]
+# end
+```
+
+### Webhook Integration for Refunds
+
+After processing a refund, you may receive webhook notifications:
+
+```ruby
+# In your webhook handler
+def handle_refund_webhook(payload)
+  if payload['type'] == 'refund' && payload['status'] == 'successful'
+    item_id = payload['related_items'].first
+    puts "Refund successful for item: #{item_id}"
+    
+    # Update your database
+    Order.find_by(zai_item_id: item_id)&.update(
+      status: 'refunded',
+      zai_state: payload['state'],
+      refunded_at: Time.current,
+      refund_amount: payload['amount']
+    )
+    
+    # Notify customer
+    order = Order.find_by(zai_item_id: item_id)
+    OrderMailer.refund_confirmed(order).deliver_later if order
+  elsif payload['status'] == 'failed'
+    puts "Refund failed: #{payload['failure_reason']}"
+  end
+end
+```
+
+### Testing Refund Functionality
+
+```ruby
+# spec/services/refund_service_spec.rb
+RSpec.describe RefundService do
+  let(:order) { create(:order, status: 'completed', zai_item_id: 'item-123', total_amount: 10000) }
+  let(:service) { described_class.new(order, amount: 5000, message: 'Customer return') }
+  
+  describe '#process_refund' do
+    context 'when order can be refunded' do
+      before do
+        allow(ZaiPayment.items).to receive(:show_status).and_return(
+          double(success?: true, data: { 'payment_state' => 'completed' })
+        )
+        
+        allow(ZaiPayment.items).to receive(:refund).and_return(
+          double(
+            success?: true,
+            data: { 'id' => 'item-123', 'state' => 'refunded', 'payment_state' => 'refunded' }
+          )
+        )
+      end
+      
+      it 'successfully processes the refund' do
+        result = service.process_refund
+        
+        expect(result[:success]).to be true
+        expect(order.reload.status).to eq('partially_refunded')
+        expect(order.refund_amount).to eq(5000)
+        expect(order.refunded_at).to be_present
+      end
+      
+      it 'marks as fully refunded when refund amount equals total' do
+        service = described_class.new(order, amount: 10000)
+        result = service.process_refund
+        
+        expect(order.reload.status).to eq('refunded')
+      end
+    end
+    
+    context 'when order cannot be refunded' do
+      before do
+        order.update(status: 'pending')
+      end
+      
+      it 'returns error' do
+        result = service.process_refund
+        
+        expect(result[:success]).to be false
+        expect(result[:error]).to include('cannot be refunded')
+      end
+    end
+    
+    context 'when refund amount exceeds order total' do
+      let(:service) { described_class.new(order, amount: 20000) }
+      
+      it 'returns error' do
+        result = service.process_refund
+        
+        expect(result[:success]).to be false
+        expect(result[:error]).to include('exceeds order total')
+      end
+    end
+  end
+end
+```
+
+### Cancel Integration with Rails
+
+#### In a Controller
+
+```ruby
+class OrdersController < ApplicationController
+  def cancel
+    @order = Order.find(params[:id])
+    
+    # Ensure order belongs to current user
+    unless @order.user == current_user
+      redirect_to root_path, alert: 'Unauthorized'
+      return
+    end
+    
+    # Cancel in Zai
+    response = ZaiPayment.items.cancel(@order.zai_item_id)
+    
+    if response.success?
+      @order.update(
+        status: 'cancelled',
+        cancelled_at: Time.current
+      )
+      
+      redirect_to @order, notice: 'Order cancelled successfully'
+    else
+      flash[:error] = "Cannot cancel order: #{response.error_message}"
+      redirect_to @order
+    end
+  rescue ZaiPayment::Errors::ValidationError => e
+    flash[:error] = "Cancellation error: #{e.message}"
+    redirect_to @order
+  end
+end
+```
+
+#### In a Service Object
+
+```ruby
+class OrderCancellationService
+  def initialize(order)
+    @order = order
+  end
+  
+  def cancel
+    # Check if order can be cancelled
+    unless cancellable?
+      return { success: false, error: 'Order cannot be cancelled' }
+    end
+    
+    # Cancel in Zai
+    response = ZaiPayment.items.cancel(@order.zai_item_id)
+    
+    if response.success?
+      # Update local database
+      @order.update(
+        status: 'cancelled',
+        zai_state: response.data['state'],
+        zai_payment_state: response.data['payment_state'],
+        cancelled_at: Time.current,
+        cancelled_by: @order.user_id
+      )
+      
+      # Send notification
+      OrderMailer.order_cancelled(@order).deliver_later
+      
+      # Refund any processing fees if applicable
+      process_fee_refund if @order.processing_fee.present?
+      
+      { success: true, order: @order }
+    else
+      { success: false, error: response.error_message }
+    end
+  rescue ZaiPayment::Errors::ApiError => e
+    { success: false, error: e.message }
+  end
+  
+  private
+  
+  def cancellable?
+    # Check local status
+    return false unless @order.status.in?(['pending', 'payment_pending'])
+    
+    # Check Zai status
+    status_response = ZaiPayment.items.show_status(@order.zai_item_id)
+    return false unless status_response.success?
+    
+    status_response.data['state'].in?(['pending', 'payment_pending'])
+  rescue
+    false
+  end
+  
+  def process_fee_refund
+    # Custom logic for refunding processing fees
+    # ...
+  end
+end
+
+# Usage:
+# service = OrderCancellationService.new(order)
+# result = service.cancel
+# if result[:success]
+#   # Handle success
+# else
+#   # Handle error: result[:error]
+# end
+```
+
+### Webhook Integration
+
+After cancelling an item, you may receive webhook notifications:
+
+```ruby
+# In your webhook handler
+def handle_item_webhook(payload)
+  if payload['type'] == 'item' && payload['status'] == 'cancelled'
+    item_id = payload['id']
+    puts "Item cancelled: #{item_id}"
+    
+    # Update your database
+    Order.find_by(zai_item_id: item_id)&.update(
+      status: 'cancelled',
+      zai_state: payload['state'],
+      cancelled_at: Time.current
+    )
+    
+    # Notify customer
+    order = Order.find_by(zai_item_id: item_id)
+    OrderMailer.cancellation_confirmed(order).deliver_later if order
+  end
+end
+```
+
+### Testing Cancel Functionality
+
+```ruby
+# spec/services/order_cancellation_service_spec.rb
+RSpec.describe OrderCancellationService do
+  let(:order) { create(:order, status: 'pending', zai_item_id: 'item-123') }
+  let(:service) { described_class.new(order) }
+  
+  describe '#cancel' do
+    context 'when order can be cancelled' do
+      before do
+        allow(ZaiPayment.items).to receive(:show_status).and_return(
+          double(success?: true, data: { 'state' => 'pending' })
+        )
+        
+        allow(ZaiPayment.items).to receive(:cancel).and_return(
+          double(
+            success?: true, 
+            data: { 'id' => 'item-123', 'state' => 'cancelled', 'payment_state' => 'cancelled' }
+          )
+        )
+      end
+      
+      it 'successfully cancels the order' do
+        result = service.cancel
+        
+        expect(result[:success]).to be true
+        expect(order.reload.status).to eq('cancelled')
+        expect(order.cancelled_at).to be_present
+      end
+    end
+    
+    context 'when order cannot be cancelled' do
+      before do
+        order.update(status: 'completed')
+      end
+      
+      it 'returns error' do
+        result = service.cancel
+        
+        expect(result[:success]).to be false
+        expect(result[:error]).to include('cannot be cancelled')
+      end
+    end
+  end
+end
+```
+
 ## Payment Types
 
 When creating items, you can specify different payment types:
@@ -595,4 +2707,7 @@ For more information about the Zai Items API, see:
 - [List Item Transactions](https://developer.hellozai.com/reference/listitemtransactions)
 - [List Item Batch Transactions](https://developer.hellozai.com/reference/listitembatchtransactions)
 - [Show Item Status](https://developer.hellozai.com/reference/showitemstatus)
+- [Make Payment](https://developer.hellozai.com/reference/makepayment)
+- [Cancel Item](https://developer.hellozai.com/reference/cancelitem)
+- [Refund Item](https://developer.hellozai.com/reference/refund)