Transaction Processing
When a merchant accepts a card transaction, they will seek an authorisation - from the cardholder’s issuing bank - that the transaction details that have been processed by their terminal are correct. Where a card issuer confirms that these details are accurate, the merchant will receive an authorisation and an authorisation code for that particular transaction at that time on that day.
However, even though an authorisation has been given, it only checks that there are available funds in that card account up to the value of the transaction at the time it is processed and that the card used has not been reported as lost or stolen. An authorisation does not guarantee that a transaction is not fraudulent or that it will not be charged back at a later date.
The following links are some of the terms a merchant may come across when accepting card transactions and these can be fully explained by an acquiring bank. Please click on these to find out more:
