To better understand how an online credit card transaction works, it helps to break it down into two key parts: Authorization and Capture.
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✅ Authorize Only – Verifies the card is valid and funds available, but does not charge the card
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💰 Authorize and Capture – Verifies the card and immediately charges it in one step
🛑 What Is a Credit Card Authorization?
A credit card authorization is a temporary hold placed on a customer’s card for a specific amount. It confirms:
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The card is valid ✅
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The customer has enough available credit 💳
No funds are transferred to the merchant at this stage. The amount is held, reducing the customer’s available credit, but remains in their account until the Capture step occurs.
🔁 What Is a Credit Card Capture?
Capture is the step where the authorized funds are transferred from the customer’s account to the merchant’s account 🏦.
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The merchant can capture the full amount or submit multiple captures up to the authorized total.
👉 For example: If $1,000 is authorized, a merchant might submit two $500 captures.
Until the funds are captured, they remain on hold and are not deposited into the merchant’s account.
⏳ How Long Does an Authorization Last?
Authorizations are temporary and typically expire after 7 to 10 days, depending on the card network (e.g., Visa, Mastercard, Amex).
If the merchant doesn't capture the funds in time:
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⛔ The authorization expires
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💸 The hold is lifted
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💳 The funds are made available again to the customer
To collect the payment after expiration, the merchant would need to re-authorize the transaction.
🧾 Summary: Authorization + Capture = Payment
Every online credit card transaction involves two key steps:
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Authorization – Reserves the funds
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Capture – Moves the funds to the merchant’s account
Without both, the transaction isn't complete!
❓ FREQUENTLY ASKED QUESTIONS (FAQS)
Q. Can I authorize a card and capture the funds later?
A. Yes. You can authorize a card without capturing funds immediately. However, you must capture within the card issuer’s time frame (usually 7–10 days) before the authorization expires.
Q. What happens if I miss the capture window?
A. The authorization expires, the hold is released, and the funds return to the customer’s available balance. You would need to start the transaction again with a new authorization.
Q. Can I capture less than the authorized amount?
A. Yes. Many systems allow partial captures, as long as the total doesn’t exceed the originally authorized amount.
Q. Why would I use “Authorize Only”?
A. This is helpful when you want to validate a customer’s card and hold funds, but delay charging until goods are shipped, services are rendered, or further checks are completed.
Q. Do all transactions use both authorization and capture?
A. Not always. Some payment systems (like many e-commerce platforms) combine both into one seamless step (Authorize and Capture). Others, like hotel bookings or rentals, may use Authorize Only with delayed Capture.