Capture
The process of finalizing a pre-authorized credit card transaction by instructing the payment processor to transfer the approved amount from the cardholder's account to the merchant's account.
Capture converts a pre-authorization hold into an actual charge that will be settled and transferred to the merchant's account. When a transaction is first authorized, it only verifies that funds are available and places a hold on that amount. The capture step confirms the final transaction amount and initiates the settlement process. Without capture, the authorization will eventually expire and no funds will transfer.
The timing of capture varies by business model and industry. E-commerce businesses typically capture at the time of shipment rather than at order placement, ensuring they only charge customers for items actually sent. Service businesses often authorize at booking and capture after service delivery. Physical retail locations usually perform authorization and capture simultaneously at the point of sale, a process called "auth-capture" or "sale" transaction.
Merchants can capture the full authorized amount or a partial amount, depending on the final transaction details. For example, if items are out of stock or a customer modifies their order, the merchant can capture less than the authorized amount. However, attempting to capture more than the authorized amount will typically result in a decline. Captures must occur before the authorization expires (typically within 3-7 days for most transactions, though timeframes vary by merchant category code and card network). Delayed capture beyond these timeframes may result in interchange downgrades, increasing processing costs.
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3D Secure
An authentication protocol for online card transactions that adds an additional verification layer between the cardholder and issuing bank, shifting fraud liability from merchants to card issuers when properly implemented.
ACH Payment
Automated Clearing House payment is an electronic bank-to-bank payment method that transfers funds directly between bank accounts through the ACH network, typically used for direct deposits, bill payments, and recurring transactions.
Acquirer
A financial institution that processes credit card payments on behalf of merchants, maintains merchant accounts, and facilitates the settlement of funds from card-issuing banks to merchant bank accounts.
Address Verification Service (AVS)
A fraud prevention tool that compares the numeric portions of a billing address provided during a transaction against the address registered with the card-issuing bank, returning match result codes to help merchants assess transaction risk.
Aggregator
A payment service provider that enables multiple merchants to process card transactions under a single master merchant account rather than each merchant having their own dedicated merchant account, common with services like Square, Stripe, and PayPal.