This is the latest installment in The Official Merchant Services Blog’s Knowledge Base effort. Well we want to make the payment processing industry’s terms and buzzwords clear. We want to remove any and all confusion merchants might have about how the industry works. Host Merchant Services promises: the company delivers personal service and clarity. So we’re going to take some time to explain how everything works. This ongoing series is where we define industry related terms and slowly build up a knowledge base and as we get more and more of these completed, we’ll collect them in our resource archive for quick and easy access. Today’s term is:
Partial Payment Authorization is a specific type of transaction process based on new rules implemented by the card associations MasterCard and Discover in 2011.
MasterCard and Discover have implemented these rule changes that require merchants in the U.S. to support Partial Payment Authorization. Host Merchant Services is here to guide you through this change with a comprehensive explanation of what this means for you as a merchant. A Partial Authorization occurs when an authorization is attempted for the full amount of the transaction and there are not enough funds available to cover the full amount, so an authorization for the amount available in the account is returned. This allows the cardholder to use the card presented for the amount available and for the merchant to obtain an additional form of payment for the difference.
A brief summary of the process is that when a card is swiped and has insufficient funds, transaction processing terminals will now prompt the merchant to accept a partial authorization. As a merchant you need to pay attention to this, and note the terminal’s prompt. You then need to confirm with the customer if they are capable of paying the remaining balance. If they can, you complete the partial transaction and then finish with a transaction for the remaining balance. If they can not, you need to reverse or void the charge. If that seems a bit complicated, don’t worry, here’s the entire process in detail, followed by further resources, including step by step guides to use this with specific terminals, that you can download and print out for your convenience.
For more information on Partial Authorization, visit our FAQ on the topic: