Managing Authorizations

Overview

If you don’t charge your customers until the time of service (or product shipment), you need to implement a way to manage authorizations. It may also be necessary to adjust a transaction amount after the transaction has completed and the authorization has expired (for example, the customer added a tip).

To keep a customer’s authorization active longer than the timeframe established by the customer’s bank, Cardknox recommends the “verify and store” method.

Note: An alternative method is multiple authorizations. However, for reasons discussed below, Cardknox does not recommend this method.

To adjust a transaction amount after it’s been authorized, use the authorization adjustment option.

Verify and Store

This method is relatively simple. When compared to the multiple authorizations method, it can potentially save you money in transaction fees. However, there is no guarantee that when you create the transaction:

  • The customer actually has sufficient funds.
  • The customer’s account is still active.

1. For credit and debit card payments, verify the card is valid:

  • cc:save – Verifies that the card passes the Luhn check. Note that this does not get sent to the bank.
  • cc:save $0 auth – Verifies that the card is active by sending it to the bank. This also returns AVS and CVV results.

2. Store the returned xToken with the customer in your organization’s database.

3. When you’re ready to collect funds, create a transaction (cc:sale) using the stored payment method (xToken).

Multiple Authorizations

Although this method does confirm that the customer has sufficient funds, Cardknox does not recommend this method:

  • It creates voids that can cause duplicate pending transactions on the customer account. This may confuse customers and prevent them from using the funds.
  • Your organization may also experience more cost from transaction fees.

If you do choose to use the multiple authorizations method, you must:

  • Create logic to examine the details returned in results and identify the payment method type.
  • Create rules based on the payment method type’s expiration timeframe.

Example:

1. Use cc:authonly to authorize the transaction amount.

Note: Don’t use cc:capture to submit for settlement.

2. Within the appropriate expiration timeframe, use cc:void to void the transaction.
3. Use cc:authonly to create a new transaction, authorizing the amount again.

Note: Don’t use cc:capture to submit for settlement.

4. If necessary, to extend the authorization, repeat steps 2 and 3.
5. To collect funds, use cc:capture to submit the latest transaction for settlement.

Authorization Adjustments

Depending on your organization, you may need to settle a transaction for an amount that’s more than or less than the original authorization amount. This is referred to as an authorization adjustment or auth adjustment.

  • Less Than – If the submitted transaction amount is less than the original authorized amount, Cardknox reverses the difference back to the cardholder.
  • More Than – If the submitted transaction amount is more than the original authorized amount, Cardknox tries to increase the authorized amount using an incremental authorization.

For both cases, if the issuing bank declines the capture, Cardknox returns a validation error, and the original transaction remains in the Authorized status.

Timeframe to Capture Authorization Amounts

Visa and American Express: 7 days
Mastercard: 30 days