Glossary
Payment authorization
The step where the card issuer or funding provider confirms that funds are available and approves the transaction, reserving the amount without moving it.
Authorization is a request to the issuer asking whether a payment of a given amount, on a given account, should be permitted. An approval places a hold on the funds; it does not transfer them. The transfer happens at capture and settlement.
Authorization outcomes matter commercially: soft declines can often be retried successfully through a different route or at a later time, while hard declines should not be retried at all. Distinguishing them is one of the main functions of a routing layer.
What it covers in practice
- Approval places a hold, not a transfer
- Authorizations expire if not captured within the scheme window
- Soft declines may be retried; hard declines should not be