Payment authorization

Payment authorization is the process of obtaining approval from a payment network or gateway to verify the availability of funds in a payer's account and authorize the transfer of those funds to a payee's account. This is a crucial step in the payment process as it helps to prevent fraudulent transactions and ensures that payments are made securely.

How Payment Authorization Works

When a payment is initiated, the payment information is sent to the payment network or gateway for processing. This includes the payer's account information, the amount to be paid, and any other relevant details. The payment network then sends a request to the issuer of the payer's account to check for available funds and authorize the payment.

The issuer will check the account balance to ensure that there are sufficient funds to cover the payment. If there are, the issuer will authorize the payment and send a response back to the payment network. The payment network will then send the authorization back to the merchant or payee, and the payment will be completed.

If the issuer declines the payment, the payment network will notify the merchant or payee that the payment has been declined. This can be due to insufficient funds, a frozen account, or other reasons.

Benefits of Payment Authorization

Payment authorization provides several benefits for both payers and payees. For payers, it helps to ensure that their funds are being transferred securely and that fraudulent transactions are prevented. For payees, it helps to ensure that they will receive payment for goods or services rendered.

Payment authorization also helps to simplify the payment process for both parties. By using a payment network or gateway, payers can make payments without having to provide their payment information to the merchant or payee directly. This helps to protect their sensitive information and reduce the risk of fraud.


Payment authorization is a critical step in the payment process, as it helps to ensure the security and accuracy of payments. By checking for available funds and authorizing payments, payment networks and gateways help to prevent fraud and simplify the payment process for both payers and payees.

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