Payment capture
Payment capture is when previously authorized funds are collected from a cardholder's account and transferred to a merchant's account. This step completes the payment process that began with authorization. Payment capture and settlement are often used interchangeably, as they refer to the same step in the payment process. However, capture is when you request to collect authorized funds. Settlement is when those funds are actually transferred from the cardholder's bank to a merchant account, typically 1-3 business days later.
When capture occurs, applicable fees are charged and the final transaction amount is finalized. After fees and charges are deducted, the remaining funds are transferred to a merchant account.
Capture methods:
- Automatic capture - funds are captured immediately after authorization
- Manual capture - you capture funds later, either individually or in batches
As for partial captures, the captured amount can be less than the authorized amount when the final cost isn't known at authorization time. This commonly occurs with hotel stays (where incidentals are added later) or gas stations (which pre-authorize a higher amount). After capture, the authorization hold is released and the cardholder's available balance decreases by the exact transaction amount.
Payments need to be captured within 7 days of authorization. After 7 days, the cardholder's bank may cancel the authorization and return the funds to the cardholder.