Overcapture

Overcapture is a payment processing term that refers to the practice of capturing funds from a credit or debit card transaction in an amount that exceeds the originally authorized amount. This process is not commonly allowed across all business types due to the strict regulations and guidelines set by card schemes (such as Visa, MasterCard, American Express, etc.). Typically, overcapture is permitted only for certain types of businesses and within a specified percentage limit above the authorized amount.

The allowance for overcapture is usually based on the nature of the business and the likelihood of variable transaction amounts. For example, businesses in industries such as hospitality or car rentals might receive authorization to overcapture to cover incidental expenses that were not included in the initial authorization at the time of check-in or rental pickup.

However, because overcapturing can lead to disputes and customer dissatisfaction if not handled correctly, card networks strictly regulate this practice. Businesses that frequently need to adjust transaction amounts might choose to secure a higher authorization amount upfront or re-authorize the transaction with the correct amount before capturing the funds. This alternative approach helps to ensure that the capture amount closely matches the revised and approved transaction amount, minimizing the risk of disputes.

In practice, overcapture should be used cautiously and within the framework provided by the card issuers’ guidelines. It is critical for businesses to maintain transparent communication with customers regarding any potential charges that exceed the initial authorization to avoid misunderstandings and maintain trust.