What does “Credit Card Authorization” mean?

When a credit card is processed, Cartfunnel first authorizes the credit card. This means that the card is checked to see if the amount we want to charge on it is approved by its issuing bank.

Authorization also reserves the amount you want to charge.At this point in the transaction, you (the merchant) are not paid yet.

Say you wanted to charge $100. If the customer’s credit card only has a $100 limit, then theoretically if he or she buys on that same credit card shortly after buying from you (through Cartfunnel), your first transaction might fail when you try to capture the payment later.

But because authorization reserves your payment amount, you’ll be able to successfully capture the payment later and won’t have a card rejection.

Please note: Certain payment gateways, like Stripe, will automatically capture authorized payments. This means that once authorization transaction is created, a capture transaction will be created automatically as well to save you the time to have to manually capture payments.