What is authorisation in card payments?

In short

Authorisation is the step in a card payment where the issuer checks the card and the account and approves or declines the amount in real time, before the merchant hands over the goods. An approved authorisation reserves the funds on the cardholder's account but moves no money: that follows through capture, clearing and settlement.

Also called
Authorization, Card authorisation, Payment authorisation
Family
Accepting payments
Facts checked

How authorisation works

The merchant's terminal or gateway sends an authorisation request to the acquirer, which passes it through the card scheme to the issuer. The request carries the card or token, the amount, the merchant's details and any authentication data.

The issuer checks that the card is valid, that funds or credit are available and that the payment does not look fraudulent. The answer comes back along the same path: an approval with an authorisation code, or a decline with a response code.

How long an authorisation lasts

An approval is a promise with an expiry date. In the Visa Core Rules of 18 April 2026, an acquirer has 10 calendar days from the authorisation to process a cardholder-initiated payment in a card-absent environment, and 5 calendar days for most card-present payments and for merchant-initiated ones.

Longer periods apply to estimated authorisations in lodging, cruise and vehicle rental: 30 calendar days. The timeframe starts on the date of a valid authorisation.

Why authorisation matters to a payments product

Authorisation is where revenue is won or lost: every decline is a refused sale. A gateway's routing, retry and authentication features all exist to get more requests approved, and an issuer's product is judged by how well it approves genuine payments and stops fraudulent ones.

Authorisation, authentication or capture?

Authentication
Confirms that the person paying is the cardholder, by PIN, 3-D Secure or a device check. Authorisation is the issuer's decision on the payment itself.
Capture
The merchant's instruction to collect an amount that was authorised. Without a capture, the authorisation expires and nothing is charged.
Settlement
The movement of money between issuer, scheme, acquirer and merchant, after clearing.

Where Authorisation shows up in a platform

Modules that do the work

Platforms that need it

Where it is written

The laws and standards this page's facts come from.

General information, not legal advice: what applies to you depends on your services and your market.

Every term

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