What Is The Difference Between Credit Card Authentication And Authorization?

Credit card authentication is a process that verifies the validity of your credit card, while authorization is the act of approving or denying payment for goods or services.

Credit Card Authentication Vs Authorization: What’s The Difference?

The two terms are often used interchangeably, but they actually have different meanings. Authorization refers to an action taken by the merchant, while credit card authentication is the verification of the customer’s identity.

The term “authorize” means to give permission for something to happen. For example, if you buy a ticket on a train, you authorize the conductor to let you, board.

If you pay with a credit card, you authorize the store owner to charge it against your account.

The term authenticates means to prove who someone is. In other words, when you use a credit card, you authenticate yourself as the person named on the card. You can do this in one of three ways:

 

1. 1. By presenting your ID (driver’s license, passport, etc.)

1. 1. By using biometrics such as fingerprint scanning

1. 1. By entering a PIN into a keypad

If you present your ID, then the merchant will know that you are the same person whose name appears on the card. This is called identification.

However, if you enter a PIN, then the merchant will only be able to verify that you are the person whose name appears on your card. This is called authentication.

Authentication is more secure than identification because it doesn’t require the merchant to look at your face or read your fingerprints. It also allows merchants to verify your identity without having to ask you any personal questions.

Authorization is the final step before the transaction takes place. When you make a purchase, the merchant authorizes the sale by charging your credit card. Once the money has been charged to your account, the transaction becomes complete.

Authorization is not required for every type of transaction. Some transactions don’t need to be authorized, including online purchases, cash payments, and ATM withdrawals.

Other types of transactions may require either authorization or authentication, depending on how much information you provide.

For example, if you want to order a pizza from a restaurant, you must first identify yourself by providing your driver’s license number.

Then, the restaurant needs to check whether you have enough money in your bank account to cover the cost of the pizza.

Finally, the restaurant must authorize the transaction by charging your credit card, so that the amount owed can be deducted from your balance.

However, if you want to pay for your pizza with cash, then the restaurant does not need to perform any additional steps beyond verifying that you have sufficient funds in your account.

In addition, some types of transactions may require both authorization and authentication.

For example, if a merchant wants to accept a credit card payment for a car rental, he or she would first need to authenticate the cardholder’s identity.

Next, the merchant would need to authorize the transaction by charging the customer’s credit card.

What Is Card Authentication Failure?

Card Authentication Failure occurs when a card reader fails to recognize the magnetic stripe data encoded on a card’s magnetic strip.

Card Authentication Failure can occur due to an error in the card reader itself or a problem with the card itself.

How To Determine If There Is A Concern With The Card Reader?

 

1. 1. If the card reader is new, contact the manufacturer for technical support.

1. 1. If the card reader was previously serviced, contact the service provider for technical support.

1. 1. If the card reader has been used for several months, contact the owner of the store where it is located.

1. 1. If the card reader still doesn’t work after contacting all three parties, then call your local consumer protection agency.

1. 1. If the card reader hasn’t worked for many years, replace it with another brand.

How Can I Prevent Card Authentication Failure?

There are several ways to avoid this common problem:

 

• • Use a new, clean card reader.

• • Keep your cards in a safe location where they aren’t exposed to extreme heat or cold.

• • Avoid storing your cards in wallets or purses made of vinyl or leather.

• • Store your cards in plastic sleeves or envelopes instead of paper ones.

• • Don’t use your cards too often.

• • Check your cards regularly for damage.

• • Keep your wallet closed while using your cards.

• • Never leave your cards unattended.

• • Be sure to keep your cards out of direct sunlight.

• • Make sure your cards are protected against moisture.

• • Don’t store your cards in places where they might get wet.

• • Always carry only one set of cards at a time.

• • Keep all your cards together in a single wallet or purse.

How Do I Recover From Card Authentication Failure?

If a card reader fails to read your card’s magnetic stripe, it will return an error message indicating that there was a problem reading the card.

You’ll receive a similar error message if you try to use a card that has been compromised.

If you’re unable to complete a transaction because of a failed card authentication, contact the merchant immediately. The merchant should cancel the transaction and issue a refund.

How Do I Report A Lost Or Stolen Card?

You can report lost or stolen cards by calling 1-800-843-5678 or visiting www.usps.com/lostcard.

How Do I Replace My Lost Or Stolen Card?

To replace your lost or stolen card, visit the website listed above. Enter your last four digits of the card number and click “Continue” and then select “I Lost My Credit Card” and follow the instructions.

How Do I Verify The Authenticity Of My Card?

You can check whether a card is authentic by entering its last four numbers into the Verification Code box on the back of the card. This code appears as a blue bar across the top of the front side of the card.

Conclusion

In conclusion, knowing the difference between credit card authentication and authorization will allow you to make purchases and receive payments safely and securely to prevent you from becoming a victim to hackers.

To take a deeper dive on these topics, check out our other processing based articles.