Authorization Time Limits: Explained
Authorization time limits will vary by transaction type and by one’s MCCMCC MCCs are determined by card networks like Visa, MasterCard and American Express, who use it to decide how much to charge the businesses for accepting credit card payments (interchange fee). MCC Codes (or merchant category codes) are assigned to merchant accounts during the set up process and are used to differentiate between types of business & industries. Each industry has different transaction patterns and differing levels of risk (potential for fraud). MCC codes are used by issuing bank to determine if they will except the transaction. For example online gambling is only permitted in the states of Delaware, New Jersey and Nevada. The code 7995 can be used to prevent transactions coming from states that don’t allow online gaming. MCC codes can also effect the merchants processing rates. An improper classification could cause a merchant to pay higher than necessary processing fees. The are approximately 500 different MCC Codes used by Visa and it is important for a merchant to make sure they are assigned to the appropriate code. Here is a handy list of all MCCs. Fortunately, Visa provides a well-detailed table that outlines all of the time limits that every merchant should be aware of. By knowing how an Approval is valid, you will know how much time you have to settle the transaction.
| TRANSACTION TYPE / MERCHANT / MCC | HOW LONG THE APPROVAL IS VALID FOR A TRANSACTION DATE |
| Aggregated Transaction in a Card-Not-Present Environment | (7)Seven calendar days from the date on which the first AuthorisationAuthorisation Authorisation This is the process of the card issuer (like Visa or Mastercard) verifying payment details and reserving the funds to capture it later. In ecommerce, in-app and point-of-sale payments, authorisation is implemented as an API call to the payment gateway. The gateway and payment processor then perform required validation and risk checks, and ask a corresponding card network to authorise this payment from an issuer to an acquirer. When a payment was authorised but hasn’t been captured yet, a merchant can also decide to cancel it for some reason (like a high risk of fraud). Note that authorisation is valid only for a limited amount of time. In case an authorised payment hasn’t been captured or cancelled, it expires after the predefined deadline is missed. Request received an Approval |
| In-Transit Transaction | Within 24 hours* of the Approval Response *Authorization may occur after the transaction is completed, while in transit, or when the cardholder reached his or her final destination. |
| Installment Transaction Prepayment Recurring Transaction Unscheduled Credential-on-File Transaction Card-Not-Present transactions classified with MCC 4121 (Taxis and Limousines) | The day when either of these transactions occur is when a Approval Response is valid. |
| Transactions* initiated at a turnstile, fare gate or point of boarding at a transit merchant classified with MCC 4111, 4112 or 4131 *Initial Authorization Request is required. | No later than 7 calendar days* from the date of the Approval Response to the Initial Authorization Request**. *The time limit the US Region is 3 calendar days. **Any Incremental Authorization Requests do not extend this timeframe. |
| Transactions* initiated by merchants who offer one of the following services: Aircraft rental Bicycle rental Boat rental Equipment rental Motorhome rental Motorcycle rental Trailer parks and campgrounds *An Estimated Authorization Request is required. | No later than 7 calendar days from the date of the Approval Response to the Estimated Authorization Request*. *Any Incremental Authorization Requests do not extend this timeframe. |
| Transactions initiated by merchants who offer one of the following services: Cruise Line Lodging Vehicle Rental *An Estimated Authorization Request is required. | No later than 31 calendar days from the date of the Approval Response to the Estimated Authorization Request*. *Any Incremental Authorization Requests do not extend this timeframe. |
| Mass Transit Transaction | No later than 3 calendar days from the date of the Approval Response |
| Other Card-Not-Present Transactions | No later than 7 calendar days from the date of the Approval Response |
| Other Card-Present Transactions | The day when either of these transactions occur is when a Approval Response is valid. |
| Source: Visa Core Rules and Visa Product and Service Rules |
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