Understanding Partial Authorizations
A customer swipes his debit card at checkout only to find he has insufficient funds in the account to cover the transaction.
What do you do?
The quick answer is that you follow the prompts on your terminal to accept a "partial authorization."
With a partial authorization, the card issuer authorizes an amount up to the available account balance for payment. Then, if your customer is capable of paying the remaining balance using another means (a credit card or another debit card), you can complete the partial transaction and then finish with a transaction for the remaining balance (aka a split-tender purchase transaction).
For example, assume you are processing a transaction for $90 and the customer's debit card has a balance of only $48.99. After the card issuer responds with a partial authorization for $48.99, you'll need to request the difference of $41.01 through another means of payment. If the cardholder doesn't have $41.01, you'll need to process a reversal for the $48.99. Likewise, you would take the same steps if the customer wanted to reverse out the $48.99 and then use another card to cover the entire amount ($90).
Note that partial authorizations primarily affect processing of debit (signature and PIN), pre-paid and gift cards.
Some Things to Know
Additional steps to be aware of include these:
- Understand how the transaction is reported. If the cardholder uses another card for the remaining amount, note that the transactions will not be linked in any way. A receipt will be issued for the partially authorized amount (it will also show up on the terminal and transaction reports as such). Then, a separate receipt will be generated for the new card-based transaction required to settle the balance. This new receipt would print with separate authorization codes, and all reports would report this as a separate transaction.
- Be ready to process authorization reversals. You are required to reverse an authorized transaction if the cardholder does not want to proceed with the transaction and the transaction has not yet settled.
- Provide the balance. You are required to print the prepaid card balance on the customer receipt or display it on a customer-facing terminal/POS device/Web page.
There IS a Benefit
In the past, a debit, prepaid or gift card with an insufficient balance would be declined. But with partial authorizations, you can now turn a potential decline or negative cardholder experience into a completed sale by asking for an additional form of payment.
Questions about processing partial authorizations? Just contact PNC Merchant Services® Customer Service at 800-742-5030.