A partial authorization request enables an issuer to approve an amount that is lower than the total transaction amount in cases when the available card balance is not sufficient to cover the full transaction amount. It can also approve a $1500 authorization for a $15.00, and if the merchant does not look closely and pay attention to the details they may lose a lot.
Partial authorizations are used for prepaid and check / debit cards and are now supported by both Associations, as well as their issuers and payment processing companies. They make it possible for merchants to complete a transaction by using the remaining available balance on the prepaid or check card and accepting an additional payment form (e.g. cash, check or another bank card) for the remaining balance. This type of transaction is known as split tender.
Partial authorizations provide you with a way to eliminate decline authorizations due to insufficient funds. You should take advantage of this opportunity and understand how to process them. There are reasons for authorization declines where there is nothing a merchant can do.
Partial Authorization Process
Customer swipes a card with available balance that is lower than the sale’s amount.
Merchant submits an authorization request with a Partial Authorization indicator to the issuer for the entire sale’s amount.
Issuer sends a partial authorization approval back to the merchant.
POS terminal subtracts the partially approved amount from total sale’s amount.
The customer makes a payment for the remaining balance using cash, check or another card.
The sale is now completed and a receipt is printed displaying the split tender amounts.
If the prepaid card used in a split tender transaction is a gift or an incentive card, the remaining balance is automatically sent to the point-of-sale (POS) terminal where it can be displayed to the merchant and printed on the sales receipt.
