How Credit Card Processing Works

Credit card transactions are done in two steps: authorization and capture. Authorization validates the card information and verifies that there is enough credit in the account to pay the order total. Capture actually moves the money from the patron's account to the merchant's account (the money takes 4-7 days to move). When a transaction is declined for some reasons, such as Address Verification System mismatch, or wrong or missing card security code, the authorize step is completed but the capture step is not. That means that the issuing bank has put a reserve on the account for the amount of the transaction. This is done because the merchant has the ability to tell the bank that they want to process this transaction even though it had the address or security code failure. We generally do NOT exercise this right since we would be charged a higher fee, and would not recommend it for our clients either.

So people that try a confirmation several times without correcting the error will end up with that many reserves on their account, even to the point of maxing out their credit limit on that card.

Those reserves will be voided within 3-5 banking days (set by the issuing bank) if the transaction is not captured. In the rare case that someone has maxed out their card because of these declines, we or you (or you if it is your merchant account) can contact the bank and ask them to release the reserve sooner. To do that we need the customer support number for the card issuer from the back of the credit card used, the credit card number, the transaction number and the charge amount.

All AVS, CVV2 and other card specific authorization is done by the issuing bank (not so complaints about the address being correct even though we return an AVS failure are not something we can do anything about. Typically the problem is that the user did not enter the numerica part of the street address and ZIP exactly (I repeat, EXACTLY) as it is printed on the credit card bill.