How Card Payments Work | Authorisation - Authentication - Settlement

When you go to the shops and tap your card on a card reader to buy some groceries, some clothes, or anything, what happens? Well for you, you tap your card, wait a few seconds, then the machine says ‘transaction approved’. You then take your goods, forget about it and get on with your life. But in those few seconds that it takes to approve a transaction a lot of things happen, between many different parties.

This video explains the three steps to card payments - Authorisation, Authentication, and Settlement.

#payments #finance #cardpayments #business

[Tom-jtrv]

Great videos Kieran, I love the short explanation and illustrative style.

[NtrovertMpostor]

Hello amazing detailed explanation! what if the pre-auth amount is higher than the agreed payment? how to disputes this if the issuing bank insists the merchant charged and processed the pre-auth amount?

[Cubito]

Not entirely correct. Authentication is an anti-fraud mechanism that validates cardholder/purchaser identify AHEAD of the transaction taking place, therefore it comes before Authorisation. Authorisation includes both the Auth request (merchant>Acq>Network>Issuer) and the Auth response (the auth request in reverse).
The card network doesn't approve the transaction, thats the issuers role - to protect and manage the funds on the cardholders behalf. The network does add mulitple layers of fraud assessment and protection, but that information (likely fraud/not fraud) is essentially given to the issuer to decide what to do with as they each have different risk thresholds for different cardholders and multiple other decisioning factors. You got settlement about right though.

[avikdey]

Will customers get their refunds when there is hold or delay for so long for 45days

[IcarianX]

Very nice video! I do have some questions though:

[yukanthanimmortal]

Great content brother !!

Do you have a discord or telegram
Channel so that we as a community can discuss about ?
Waiting for your reply brother !
May the economy be with

[avikdey]

It's all almighty god's cosmic web-n control from telepathy humans or machines can't do anything that dimension of INTELLEGENCE allow all cosmic matters anti matters to do it's karma /actions step by step series of events..cosmic web/internet /intranet/ethernet /mayajal-memory/psychology