A credit card authorization code is a two to six-digit alphanumeric code that is generated by a card issuing bank. This code is generated at the time of transaction and is unique for each transaction.
The credit card authorization code is generated when a customer enters their card details at checkout and hits the submit button. At this point, the payment gateway will send a request for credit card authorization to the issuing bank.
The code that the bank returns will authorize the transaction if the card is valid and there are sufficient funds in the account.
On issuing the authorization code, the card company will put a hold on funds in the account until the merchant takes the payment. Some merchants submit their credit card payments in batches so an authorization period and this hold of funds is important to ensure the payment completes.
Card authorizations usually last for up to three to five business days.
Merchants can complete payment without an authorization code but an unauthorized payment may be subject to a later chargeback.
Authorization codes should be recorded alongside other transaction data so they can be referenced if there is a dispute or other problem.
Card Authorization Error Codes
If the authorization fails, the customer will usually be informed that the payment has not been completed instantly.
The error code returns indicates why authorization failed. This could be because of an error such as a wrong digit in the card number, insufficient funds in the account, the card is restricted for use at certain types of businesses, because the card has been reported lost or stolen, or technical issues.
Decline codes may also be sent if there is a transaction that appears to be a duplicate. In this case, requesting the transaction later may help to prevent it from being declined.
If authorization fails, the customer can try to submit their card details again after correcting any errors. The merchant will then obtain a new authorization code.
In some cases, merchants may need to manually call the issuing bank for instructions if a card is declined.
Alternatively, a customer may need to call their bank and ask for certain restrictions to be lifted temporarily before trying to complete the payment again. This is common for large transaction amounts that may be automatically flagged for having a high risk of fraud.