Auth Only (Authorization Only)

Authorization only, commonly referred to as "Auth Only," is a transaction type in the payments industry. It means a specified amount of funds are held on a customer's credit card, but not immediately charged. This process ensures that the card is valid and the customer has sufficient credit for the purchase without completing the transaction.

It's useful in industries where the final purchase amount may vary, such as in hotels or car rentals. The merchant secures authorization at the time the card is swiped. Then, once the final amount is determined, the merchant can then complete the transaction.

Auth Only is crucial for managing financial risks while still providing flexibility. It ensures merchants can secure funds while accommodating potential changes in the transaction amount.