About authorization

Authorization is the process for approving or denying a transaction, whether it is a withdrawal or a payment before it is completed or before a financial resource receives a refund.

The agents involved in the authorization process are:

Person/Cardholder: The product or service consumer using the card to pay for products and services;
Merchant: Company accepting the credit card as payment for products and services;
Acquirer: A card-brand-licensed member analyzing and accepting merchants in their card program and financial transaction processes. It provides the merchant with an entire structure for capturing transactions and marketing for the card;
Card brand: It licenses their brand for associated financial institutions (members);
Issuer: Card-brand-licensed financial institution for issuing the card. It is responsible for granting credit, issuing the card, authorizing, settling and billing.

The basic steps for authorizing a transaction are shown below:

FIG: Transaction authorization flowFIG: Transaction authorization flow

FIG: Transaction authorization flow

1 – A person makes a transaction at a merchant;

2 – The merchant passes the payment credential information and the transaction amount to the acquirer;

3 – The acquirer combines the transaction information in a message requesting authorization and passes it to the card brand;

4 – The card brand passes the authorization request to the issuer for review and authorization or denial;

5 – The issuer reviews the request by approving or denying the transaction and sends the card brand a message as an authorization response;

6 – The card brand forwards the authorization response to the acquirer;

7 – The acquirer passes the result of the authorization request to the merchant;

8 – The merchant passes the result of the authorization request to the person;

9 – The person receives follow-up on their transaction authorization.

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