Card Lifecycle
A credit card payment moves through many steps from the cardholder offering their card as the method of payment all the way to the merchant receiving funds in their bank account. Use the guide below to better understand each phase in card payment.
1. Card Acceptance
The cardholder inputs their card data into a secure form.
In online payment processing, this form is presented on a website or mobile app, asking for the credit card number (sometimes referred to as a Personal Account Number or PAN), the expiry date, and the Card Verification Data (CVD). Moneris provides solutions to integrate with your online website for collecting card data in a secure manner, such as Hosted Tokenization or Moneris Checkout. You can also develop your own solution to collect card data, but doing so requires PCI compliance to ensure the security of the data.
2. Cardholder Authentication
The cardholder proves their identity to their issuing bank.
For services like 3-D Secure, this might involve a seamless experience with the bank using device details from the cardholder’s browser session to confirm identity. It can also involve a more direct prompt for passcodes as a challenge or a text with a temporary code to input in a banking application.
3. Card Authorization
Moneris ensures the card is valid, funds are available, and reserves funds for the merchant.
Either authorization or pre-authorization can occur in this phase depending on the transaction type selected by the merchant.
Authorization is used for short-term holds on funds. The final captured amount is the same as the authorized amount. This type is used within a Purchase transaction.
Pre-Authorization is used for temporary holds on funds lasting periods between 7 and 31 days. The final captured amount may differ from the temporary hold within variances allowed by each card brand.
The issuing bank and the merchant’s business vertical (Merchant Category) can influence the period funds are held
Card brands allow businesses to capture held funds for less than the initial hold. This is often used in business for rental agencies taking a “security deposit” for potential fees that may or may not incur.
Until a preauthorization is captured, it remains eligible for cancellation.
4. Capture
Moneris ensures that funds on the card are scheduled for deposit to the merchant’s bank account.
All captured payments accumulate within an open batch, a bundle of transactions
Until the batch is closed, a captured payment is eligible for cancellation. Cancelling a captured payment that used pre-authorization in the previous step does not allow reuse of that pre-authorization; the merchant must restart the payment process again if they wish to charge the card for a different amount.
Merchant accounts using Moneris Gateway products have their batch close automated for 11PM at night. If a merchant wishes to close their batch at a different time that suits their business model, the automation can be adjusted within their account’s Merchant Resource Center.