What is a refund authorisation?

In short

A refund authorisation is a real-time message that a merchant sends through its acquirer to the card's issuer to have a refund approved before the refund is cleared. A refund authorisation lets the issuer show the refund as pending in the cardholder's banking app at once, days before the money itself arrives.

Also called
Online refund authorisation, Credit authorisation, Refund authorization
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Accepting payments
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How a refund authorisation works

Refunds on cards used to travel only in the clearing file, so a cardholder saw nothing until the credit was posted. With a refund authorisation, the merchant's system sends an authorisation request marked as a refund, for the amount to be returned. The issuer answers at once, and the refund is then cleared as usual.

An issuer can also decline, for example because the account is closed. The merchant then knows straight away that the money has to be returned another way.

What Visa and Mastercard require

In the Visa Core Rules of 18 April 2026 (4.1.1.3), an issuer is prepared to receive and respond to an authorisation request for a credit transaction, and updates cardholder-facing applications with the pending credit in the same timeframe as a purchase. The issuer also keeps its approval rate for credit transactions at 99% or more.

In Mastercard's Transaction Processing Rules of 9 June 2026, an acquirer has had to support the online authorisation of refunds acquired on the Dual Message System since 12 April 2024, and enables it for a merchant on request (2.1). Issuers support it for all Mastercard and Debit Mastercard account ranges except non-reloadable prepaid ones (2.2).

Why refund authorisation matters

The most common question after a return is where the money is. A pending refund in the app answers it, which cuts calls to the merchant and keeps cardholders from disputing a payment that is already being refunded. A gateway supports it by sending the refund as an authorisation first, and by passing the issuer's answer back to the merchant.

Where a refund 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.

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