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Payments

Authorization and capture

Authorization reserves funds; capture takes them. The gap between the two is where a lot of billing logic lives.

Authorization asks the issuer to reserve an amount and confirm the card is good. Capture tells them to actually move it.

For subscriptions the two are usually simultaneous. They separate when you want to verify a card without charging it, hold funds during a trial, or confirm availability before provisioning.

Authorizations expire, typically in about seven days, and an expired authorization must be redone rather than captured. Holding a large authorization on a customer’s card reduces their available balance and is a common cause of complaints when it is not clearly explained.

Related terms

  • Settlement and payout Funds moving from the card networks to your bank account, usually in batches and net of fees.
  • Decline code The reason an issuer gave for refusing a payment. The difference between a soft and a hard decline decides what to do next.
  • Payment gateway and processor The gateway routes a transaction; the processor moves the money. Many products do both, which is why the terms blur.