Credit card payments can be difficult, but with consumers preferring to pay for goods and services using a credit card, it is vital that your business is set up for credit card authorizations. Luckily, we have some great resources that can make the process much easier. Use our templates to speed up your work.
What is a Credit Card Authorization Form?
An authorization form is a tool that enables merchants to request permission from customers to charge fees to their credit cards. This form gives the merchant permission to charge the card at any point during — or after — the specified period (month, quarter, etc…) and the amount specified by the merchant.
Is It Safe to Fill out a Credit Card Authorization Form?
A credit card authorization form is a formal and legal document. It requires the signature of the holder. This gives permission to a merchant to charge an amount from the card.
When and Why Use a Credit Card Authorization Form?
The form is typically used by businesses to charge a cardholder on an ongoing basis. This avoids chargebacks because it doesn’t happen often. If you have some flexibility in the life of the card and you don’t want chargebacks, then it’s better to use recurring billing.
The issuer and merchant must consider their own costs when deciding whether to accept a card for recurring billing and the merchant can refuse a card if the issuer does not permit recurring billing for the specific card type.
The dangers of chargebacks should never be taken lightly. Sure, there are some merchants who can find ways to deal with them. But for smaller retailers, the whole process can be very daunting. But in reality, chargeback protection is quite simple.
What Is Included in a Credit Card Authorization Form?
A credit card authorization form doesn’t have to be a complicated document. Typically it contains the name of the person using the card and their billing address, basic information about what they’re buying, and their signature authorizing purchase. It should also contain a disclaimer advising that that their signature authorizes payment and applies for acceptance of the agreement with the shop or store as well as any charges associated with the purchase.
- Business Information (The Merchant)
- Billing Address (Cardholder’s)
- Name and Signature (Cardholder’s)
- Card Type (Cardholder’s)
- Name On Card (Cardholder’s)
- Card Number (Cardholder’s)
- Expiration Date (Cardholder’s)
How to Accept a Payment With a Credit Card Authorization ?
An authorization is typically a pre-authorization, which means that the funds for the purchase haven’t actually been transferred to the merchant but instead exist in an authorization ‘reserve’. The financial institution maintains this fund and returns it to the customer if they choose not to pay using their card. This reserve usually lasts only a few days, after which time the bank will either execute a final transaction or return the money back to the customer, effectively failing the transaction.
There are two ways cards can authorize. The first way is if the authorization request is approved, the account will then be settled and the payment transferred. Although the process of using a credit card often occurs without incident, merchants are able to place an authorization hold on the account of the cardholder. This decreases the customer’s credit limit until the transaction is completed. This generally lasts from 1 to 15 business days.
In order to accept payment with a credit card authorization, the following information will be required by the merchant’s central processor:
For a bank account – Automated Clearing House(ACH) Authorization:
Account Number (Account Holder’s)
Routing Number (Account Holder’s)
Address (Account Holder’s)
Name (Account Holder’s)
For a Debit or Credit Card Authorization:
16 Digit Number (Credit/Debit Card)
Billing Address (Cardholder’s)
Credit Card Authorization Form Examples
Whether you need to process one-off transactions or recurring payments, there is a form for that. Credit card processing has become a necessity for many businesses and organization. In fact, 90% of online sales were made via credit card in 2022.
For such a popular payment method, the variety of reasons for accepting it is staggering. Hospitality organizations can accept credit card payments for hotel reservations or restaurant bookings, while retail stores can accept them for their point-of-sale systems. Even legal services could use the authorization forms we’ve provided to successfully initiate credit card fees. Whatever your reasoning, our collection of customized samples aims to provide one form that would work best for your business sector.