Authorization Transactions

An authorization transaction is conducted to validate a card with the cardholder's issuing bank and confirm the card's validity and available funds. This process does not instantly transfer funds but temporarily reserves the funds in the cardholder's account if sufficient fund is available. To complete the transfer from the cardholder's account to the merchant's account, the authorized transaction must be captured. The captured amount may be lower than the authorized sum, and merchants can choose to capture portions of the authorized amount on multiple occasions.

Also, if the merchant wishes to capture an amount higher than the authorized sum, they have the option to conduct an incremental transaction using the authorized amount as a base and then proceed to capture the total amount comprising the authorized sum and the incremental value.

Authorization transactions are commonly employed by merchants in situations where goods are dispatched post-purchase.