PaymentAuthorized

PaymentAuthorized is a status used in electronic payment processing to indicate that a payment instrument, such as a credit or debit card, has been approved by the issuer and funds up to the authorized amount are reserved for a specific merchant transaction. An authorization does not transfer funds at that moment; instead, it places a temporary hold on the cardholder’s account and reduces available credit or funds.

In typical flows, the merchant submits an authorization request through a payment processor or gateway. If the issuer approves, the processor returns an authorization code and the transaction is marked as PaymentAuthorized. The merchant may then perform a capture to complete the transfer of funds. Captures happen within a window defined by the card network and issuer; if the capture is not performed, the authorization will typically expire after a period (for example, several days) and the funds become available again.

PaymentAuthorized differs from completed or settled transactions. The authorized funds are not guaranteed until a corresponding capture and settlement occur. If the merchant cancels the sale, the authorization can be voided by the issuer or the processor, releasing the hold immediately.

Certain industries use extended authorization holds, known as pre-authorization, such as hotels or car rental agencies, where the reserved amount may exceed the final charge or be held for longer periods. In some cases, partial captures or incremental captures may occur after an initial authorization.

Understanding PaymentAuthorized helps explain cash flow for merchants and the consumer experience, as it affects available balances, potential holds on cards, and timing of charges.