Learn How The Credit Card Authorization Process Works
The process known as credit card authorization refers to when companies that issue credit actually approve or deny requests for the use of credit. The credit card company will normally approve the transaction in case it is satisfied that the account number is valid and that the expiration date has not elapsed. This will help the company verify that the account of a credit card holder is still open and it also helps the credit card company know for sure that the transaction won't end up placing the account over its credit limit.
Online Mode Or Batch Mode
The fact of the matter is that a majority of transactions do get approved and thus when the term authorized transaction is used, it actually refers to when the request for credit has been approved and authorized. Furthermore, credit card companies can choose two different processes to handle credit card authorization which are online or batch mode and which mode of credit card authorization is most appropriate generally depends on the credit card company's own specific requirements.
When credit card authorization is performed online, the whole authorization gets completed in just a few seconds even though each transaction is authorized separately as and when the transaction occurs. And in addition, the status of the credit card authorization is returned almost instantaneously once the transaction has been submitted for further approval. In the case of online credit card authorization, if the request gets denied, the cardholder is immediately informed of the denial that the transaction could not be completed for any number of reasons.
Sometimes, the credit card company may resort to using batch credit card authorization process, especially when it needs to handle a large volume of transactions that are best handled through batching them up and processing them according to a schedule such as after working hours. Also, credit card authorization done on a batch processing basis are ideally suited when the customer is not receiving services or products at the time when the card number is being presented or when the card holder does not directly communicate with the company such as when the transaction is a mail order one.
There are advantages to either form of credit card authorization. There are certain constrains including online payments needing to be encrypted before being sent over the Internet and thus the credit card company will need to use different Internet payment gateways such as Authorize.Net or VeriSign.
