What is the difference between Authorization, Capture, and Sale?
Authorization
You request an authorization when a customer makes a purchase. An authorization, provided by the customer’s card issuing bank, confirms the cardholder’s ability to pay, ensuring that the customer’s credit card account is in good standing with sufficient funds to complete the purchase.
Capture
After providing a service/product to the customer, you ‘capture’ the relevant information from the authorization and submit it in a capture/settlement request that your processor uses to initiate a funds transfer between the customer’s credit card account and your checking account.
Sale
A sale combines the authorization and capture process in one transaction. Credit card associations require that you submit a sale transaction request only when you fulfill an order immediately. For example, when selling an item over the counter in a retail store. Transactions that include physical shipments are not fulfilled until shipment, usually sometime after the customer ‘purchases’ the product, and so would not qualify as a sales transaction.