Technical
Capture
Definition
Capture the process of finalizing a previously authorized transaction for settlement. Capture confirms the transaction amount and initiates fund transfer. Must occur within the authorization validity period (typically 7-30 days depending on MCC). Some merchants auto-capture immediately; others delay until fulfillment. Pre-auth + delayed capture is common for hotels, car rentals, and advance bookings.
Related Terms
Authorization
The process of requesting approval for a card transaction from the issuing bank. The authorization request includes card details, amount, and merchant information. The issuer checks available credit/funds, fraud rules, and account status before responding with an approval or decline. Authorization is the first step - funds are reserved but not transferred until capture.
Settlement
The process of transferring funds from captured transactions to the merchant's bank account. Settlement typically occurs in batches (daily or weekly). Timing varies by acquirer and merchant agreement - next day, T+2, or weekly. Net settlement deducts fees and chargebacks from gross volume. Faster settlement improves cash flow but may come with higher costs.
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