What is Authorization | Solidgate
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Authorization

 

Authorization request verifies sufficient funds and reserves them for settling the payment transaction. Authorization happens at the moment of the swipe, dip, or tap at the payment terminal. It is a crucial step that determines whether the cardholder has the necessary funds or credit to complete the transaction.

During authorization, the issuing bank verifies the legitimacy of the transaction, checking for factors like available balance, account status, and potential fraud indicators. If approved, the transaction moves forward, and the authorized amount is reserved for the impending purchase. If declined, the transaction is halted.

Authorization involves communication between the merchant, cardholder, acquiring bank, and card-issuing bank, ensuring the security and integrity of electronic payments.

 

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