In international credit card payments, Authorization (pre-authorization) is a very important step. It is the first step in the credit card transaction processing procedure. The issuing institution (such as Visa or Mastercard) verifies payment details and reserves funds for later capture.

In e-commerce, in-app payments, and point-of-sale payments, authorization is achieved through API calls to the payment gateway. The gateway and payment processor then perform necessary verifications and risk checks, and request the corresponding card network to authorize the payment from the issuer to the acquirer.

When a payment has been authorized but not yet captured, merchants may also decide to cancel it for certain reasons (such as high-risk fraud).

Note

Authorization is only valid for a limited time (generally 7 days). If the authorized payment is neither captured nor canceled, it will expire once the scheduled deadline is missed, and will automatically VOID.

Main purposes of pre-authorization:

• Verify credit card: Ensure the credit card is valid and not reported lost or stolen.
• Reserve funds: Temporarily freeze a certain amount in the account to ensure future payments.

Main steps in the authorization process include:

1. Transaction Initiation:

   • When a cardholder makes a credit card payment at a merchant, the merchant collects the cardholder's credit card information, including card number, expiration date, CVV, etc.

2. Sending Authorization Request:

   • The collected credit card information is sent through the merchant's payment gateway to the payment processing network. This is specifically reflected in requesting the order placement API or place order and pay with the value of captureDelayHours:

     captureDelayHours	Notes
     0	Automatically capture immediately after order placement, no need to manually call CAPTURE-Pre-authorization Capture

|-1| Manual capture, requires calling CAPTURE-Pre-authorization Capture after success, not supported for local payments |

- The payment processing network forwards the request to the issuing bank for verification.

3. Issuing Bank Processes Request:

   • The issuing bank checks the card's validity, account balance or credit limit, and the legitimacy of the transaction.
   • If everything is normal, the issuing bank approves the transaction and returns an authorization code; if there are issues, the authorization will be rejected.

4. Authorization Response:

   • The authorization result (approval or rejection) is sent back to the payment gateway, then passed to the merchant.
   • If authorization is approved, the merchant can continue with the transaction.

API List

• CAPTURE-Pre-authorization Capture
• VOID-Pre-authorization Cancellation

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