When you see in the logs "deposit_unknown" or "external_deposit", that means the transaction is being processed with a scheme outside of our APIs (like the Faster Payments or Sepa), but as long as it's a Settled transaction the funds are still added to your wallet like it is being processed via any other closed-loop payment.
What we could advise is to implement a logic that considers the webhook for this type of transaction at its Settled status, so you're sure the funds landed in your wallet and the user is being credited accordingly.
Considering the transaction's status would make sure that only received payments are credited to users, regardless of how they are processed.
How should you process it once we're receiving the related webhooks?
It is up to you to decide how to process it. You can either credit the funds to the user's account or refund the payment. You will receive details of the payment via the webhook and it will also be shown in the Console.
Can you block this option?
At present, it is not possible to block it as anyone with the account number and sort code can pay into the account.
After the user utilise this option, can you refund the payment?
Yes! A refund can be done manually, using the details from the webhook or Console.
Why does this shows up as processed via TrueLayer's API?
It does cause it's a transaction added to your wallet, but we only get the Settled status and related webhook.