Payment Processing Services Authorization Best Practices

Merchants that take credit cards both in face-to-face and non-face-to-face settings are required to follow a set of basic payment processing services authorization best practices.

Authorizations by Telephone

If the merchant must obtain authorization by telephone, it will have to call its processor's call center at the number given it by the service provider and be prepared to provide the following information:

• Account number.
• Payment processing services number.
• Expiration date.
• The whole sale's amount.

At the time an authorization approval is given, the retailer will be provided with an authorization number. It will need to supply this number in the appropriate field on the transaction receipt. If the retailer is not able to get an electronic approval to its authorization request and then obtain a response number by phone, the payment processing services user will have to make the payment (force it) by implementing the instructions of its POS device manufacturer. If the card is not legitimate and cannot be accepted, the merchant will receive a message declining the sale. No comments will have to be made. The customer must then be instructed to call its card's issuer for further information.

Payment Processing Services Authorization Procedures for Recurring Sales

If the merchant processes recurring or installment sales, it will need to obtain an entirely separate, legitimate authorization approval response for each single installment prior to finalizing it. If the payment processing company (American Express or Discover) or association (MasterCard or Visa) or the card's legitimate user has terminated the recurring payment plan, the retailer is not permitted to process any future installments beyond the date of termination. Keep in mind that the consumer is only requested to request the cancellation verbally, he does not have to make it in a written form.

Alternatively, if the consumer who enrolled in the recurring plan cancels his or her card account agreement or if the card issuer does it for them, the payment processing services account holder is not permitted to issue any future installments and is asked to secure an alternative method of collecting the due amount from the customer.

Keep in mind that an approval to the authorization request for one recurring payment is not an insurance that any future installments will too be authorized or recompensed. I repeat, another approval is required for each single installment. If at some time the customer initiates a dispute in regards to any single installment payment or the items or services the merchant agreed to offer, the acquirer may, at its sole discretion, charge back that one sale and any preceding ones the merchant may have submitted.

The topic of chargebacks is an enormously expansive one and I will offer an overview of it in other posts. For now, suffice it to that you will need to understand in detail your liability as outlined in the terms of your payment processing services contract and should work with your acquirer to comply with pertinent industry regulations.