Authorization is a process by which you confirm if your customer’s credit card has enough credit to buy goods or services from you. The authorization process also confirms whether the card is valid or not. Authorizations can be obtained through an e-commerce website, a credit card machine or over the phone.
The process of authorization consists of a series of steps and the entire process takes place within seconds. First, the customer displays their credit card information to buy a product or service. This can occur online in person or over the phone.
Secondly, you communicate the card information to the Merchant. In a card-present environment, for example, by swiping the card and entering the price of the good or service you are sending the necessary data to make the transaction Merchant. Then, Merchant forwards your request to the specific card payment brand. These brand is usually Visa® or MasterCard®.
Afterwards, the payment brand (like Visa® or MasterCard®) sends your request to the card issuer (the bank). The issuer then processes the approval or decline of the transaction. The response is sent to the payment brand and the payment brand transmits the answer to Merchant.
Finally, Merchant forwards the response to you. This can be done via e-commerce website, your point-of-sale device or verbally over the phone. Now you have all you need to complete the transaction.
If the card is approved, you will receive an authorization number. If the card is declined, the purchase will not be completed. A third option is that the card can be referred. A referral is a request for further information from the seller or the cardholder before issuing the authorization. Merchant can receive a referral response as a security measure. If the event of receiving one, we will contact the issuer and request an authorization on your behalf directly.