What is the difference between an authorize and a capture and a auth/capture. Thanks. Is the capture where the batch fee comes into play?

The first step in any credit card transaction is to obtain an authorization[b].

This takes place when the gateway or point-of-sale (POS) system you are using sends a transaction request through the "front-end" (authorization) network that is contracted by your merchant account provider.

The front-end network then transmits a transaction [b]authorization request through the Visa, MasterCard or appropriate third party (Amex,Discover,etc.) network.

If it is sent via the Visa or MasterCard network, the Issuing Bank for the credit card is queried as to whether they will approve or decline the transaction. If they approve it, an authorization code is issued and the credit line for that cardholder is temporarily reserved/reduced.

If you then wish to actually capture the sale, then at the end of the day, upon batch settlement, the authorization will become permanent and the sale will be closed out. And yes - as you mentione above... upon batch settlement is where any batch header/settlement fees would be incurred.

The cardholder's credit line will then go from being a "temp auth" to an actual sales transaction with that amount of credit removed permanently from their line and then the funding process will begin with the Issuing Bank transferring the net funds to the Acquiring Bank and then finally routing it to your local bank account.

Different gateways and processors sometimes refer to some of these terms in different ways. For instance, some gateways give you an "Auth", "Capture" or "Auth-and-Capture" option. Others call it a "Pre-auth", "Capture" or "Sale".

However, at the end of the day - for any given transaction you really only have 2 main ways of doing it:

1. You can run it as an Auth-Only / Pre-Auth... and just reserve the funds temporarily and then later, decide if you want to Capture it.

2. You can run it as an Auth-and-Capture - doing both the authorization and marking it for settlement at the same time.

Hope that info is helpful!

The first step in any credit card transaction is to obtain an authorization[b].

This takes place when the gateway or point-of-sale (POS) system you are using sends a transaction request through the "front-end" (authorization) network that is contracted by your merchant account provider.

The front-end network then transmits a transaction [b]authorization request through the Visa, MasterCard or appropriate third party (Amex,Discover,etc.) network.

If it is sent via the Visa or MasterCard network, the Issuing Bank for the credit card is queried as to whether they will approve or decline the transaction. If they approve it, an authorization code is issued and the credit line for that cardholder is temporarily reserved/reduced.

If you then wish to actually capture the sale, then at the end of the day, upon batch settlement, the authorization will become permanent and the sale will be closed out. And yes - as you mentione above... upon batch settlement is where any batch header/settlement fees would be incurred.

The cardholder's credit line will then go from being a "temp auth" to an actual sales transaction with that amount of credit removed permanently from their line and then the funding process will begin with the Issuing Bank transferring the net funds to the Acquiring Bank and then finally routing it to your local bank account.

Different gateways and processors sometimes refer to some of these terms in different ways. For instance, some gateways give you an "Auth", "Capture" or "Auth-and-Capture" option. Others call it a "Pre-auth", "Capture" or "Sale".

However, at the end of the day - for any given transaction you really only have 2 main ways of doing it:

1. You can run it as an Auth-Only / Pre-Auth... and just reserve the funds temporarily and then later, decide if you want to Capture it.

2. You can run it as an Auth-and-Capture - doing both the authorization and marking it for settlement at the same time.

Hope that info is helpful!


Haha. Awesome. I wasn't expecting such a detailed answer. Thanks alot!

Happy to help. :)

Really great information...wow :lovewht: