Capture (or Clearing and settlement)

Capture is a crucial phase in the payment processing cycle, referring to the process whereby an authorized transaction is finalized by transferring the reserved funds from the cardholder's account to the merchant's account. This step is essential after a payment has been authorized by the cardholder's bank, indicating that funds are available and earmarked for the transaction. The capture of these funds completes the transaction, allowing the merchant to receive payment.

Once a payment is authorized, capturing is necessary to conclude the transaction. Typically, payments are captured automatically, immediately following authorization, ensuring swift completion of the transaction. However, many payment systems offer flexibility with features such as separate authorization and capture, which allows merchants to delay the capture of funds. This can be beneficial in scenarios where the merchant may need to confirm availability of goods or services before finalizing the transaction.

Merchants can manage captures manually through customer areas or API calls, which provides control over when funds are actually transferred. This is particularly useful in managing cash flow or in cases where customer satisfaction is contingent upon confirmation of certain conditions post-authorization. Additionally, merchants have the option to perform partial captures, which are useful in multi-item orders where items may be shipped at different times.

Modifications (Captures, Cancels, and Refunds): Together with cancellations and refunds, captures are classified as modifications, as they alter the state of an initially authorized payment request. This terminology reflects the various adjustments a merchant can make post-authorization to manage transactions effectively:

Understanding the interplay between these processes is key for merchants to effectively manage transactions, ensure customer satisfaction, and maintain accurate financial records. These capabilities provide merchants with necessary flexibility and control over financial transactions, enhancing both operational efficiency and customer service.