Credit Card Capture Definition

Credit card capture or authorization capture takes place after a payment authorization. It’s when the authorized money is transferred from the customer’s account to a merchant’s account. So, in short, the transaction amount doesn’t reach the merchant account until the funds are captured. Read on to learn the details.

When a credit card transaction is made, the payment processing goes through two stages:

The credit card authorization — This is when the transaction is verified by the credit card company. They check the customer’s credit card validity and whether they have sufficient funds for the transaction. When everything’s fine, the transaction is then authorized and the total amount of transaction is deducted and held from the customer’s credit line account. Note that the money is not transferred to the merchant account yet. This is when credit card capture comes in.
Credit card capture — This is when a merchant “tells” the credit card company that transaction has been completed between them and the customer. Now, money can be transferred.

Look at the example below

Let’s assume that our customer makes a transaction of $20 and pays with credit card. This means that the transaction is authorized by the credit card company and then the $20 is deducted from the customer’s credit card account and waits for an authorization capture from the merchant to be transferred. After shipping the product, merchant issues a credit card capture for $20 from the customer’s credit card.

There’s a given time frame set between an authorization and a capture to which a merchant is able to capture authorized funds. It can be up to 28 days for a credit card and up to 7 days for a debit card. In some cases, depending on the credit card scheme, the time may vary. Credit card authorization must be captured within this set time. If not, the card authorization becomes void and the deducted fund is returned to the customer’s account.

Credit card capture comes in two ways:

Automatically — This is the most common scenario. It’s when the credit card capture is automatically sent by the merchant’s acquiring bank on behalf of the merchant. A merchant doesn’t have to do it manually, and the funds are usually captured immediately after the authorization.
Delayed — In this scenario, the merchant request to have the ability to control their credit card authorization and a capture request. If the request isn’t sent between this period, the authorization will expire. The delayed capture is common for servicing companies, where the customer pays for a service and the payment has been authorized, but the capture is delayed till after the service is delivered.

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