What is an authorised transaction?

In short

An authorised transaction is a payment the payer has consented to, the meaning in EU payment law, or a card payment the issuer has approved, the meaning in card processing. The two senses of authorised transaction differ: an issuer can approve a payment that the cardholder never agreed to, and the law then treats that payment as unauthorised.

Also called
Authorised payment, Authorized transaction, Approved transaction
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Accepting payments
Facts checked

An authorised transaction in payment law

Article 64 of PSD2 says that a payment transaction is considered authorised only if the payer has given consent to execute it, in the form agreed between the payer and the payment service provider. In the absence of consent, the transaction is unauthorised.

For an unauthorised transaction, Article 73 requires the payer's provider to refund the amount immediately, and no later than the end of the following business day after noting or being notified of it. The exception is where the provider has reasonable grounds to suspect fraud and reports those grounds to the national authority in writing.

An authorised transaction in card processing

In a card system, authorised means that the issuer returned an approval to the authorisation request. That says the card was valid and the funds were there. A payment made with stolen card details is approved by the issuer and unauthorised in law.

Why the difference matters

Disputes, fraud reporting and refunds turn on consent, not on the approval code. Authorised push payment fraud is the opposite case: the payer did consent, having been deceived, so the transaction counts as authorised.

A banking or card app that labels a status as authorised is using the processing sense, and its terms and support scripts use the legal one.

Where an authorised transaction 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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