Authorization Definition.
Real-time request to the issuer (ISO 8583 messages) to check that the card is valid, not blocked, and funded, and to assess fraud risk. An approved authorization reserves the amount against the cardholder’s limit but moves no money: capture, then settlement, are what complete the payment. The response code (00 = approved, 05 = declined, etc.) determines the next step.
See also
Where this term appears
GuideThe four-party modelGuideThe role of banksGuideMerchant, acquirer, PSPGuidePayment schemesGuideCentral banks and payment infrastructuresGuideFrench fintech: an overviewGuidePayments in GermanyGuidePayments in AustriaGuidePayments in the Baltics and FinlandGuidePayments in the Netherlands and BelgiumGuideProtecting customer funds, and what happens when the institution failsGuidePayments in Germany, Austria, and Switzerland