What is an “authorization”?
When you use your check card for a purchase and do not enter a PIN, the merchant will request an approval or an “authorization” for the transaction. This authorization generally confirms that an account is open and the purchase amount is acceptable at the time of the request. The purchase amount sent by the merchant for authorization varies by merchant type. Many merchants request an authorization for the exact purchase amount. However, some merchants may send a nominal amount such as $1 or an estimate that is more or less than the actual purchase amount. Each authorization will show as a pending transaction. When the transaction is presented to the bank, the actual purchase amount is deducted from your account, usually within two to three business days. If the authorization is not matched with an actual purchase within three business days, the transaction will no longer be displayed as pending on your account.
As the name implies, an authorization is a transaction you use to: Help verify that the card is not counterfeit Verify that the cardholder has sufficient credit for the purchase Place a “hold” on the cardholder’s credit line for the amount of the transaction An authorization is required in order to complete a Sale transaction.
An Authorization is a verification that the system carries out in relation to your credit card to guarantee that it is valid and there are sufficient funds. This authorization keeps the funds aside for 48 hours until your reservation is confirmed or cancelled. So the money remains in your account, but is only available for this transaction. If the authorization is confirmed, the funds are debited from your account and credited to InterHabit’s account. If the authorization is cancelled, the funds are released and remain in your account.
