Transaction Type

What transaction type is

A transaction type is the processing action assigned to a payment operation. For example, an authorization checks card details and reserves the requested amount, while a capture completes the payment using a successful authorization.

Transaction type describes what happens to a payment. Transaction refers to the individual payment event itself, such as a customer paying a $75 invoice. The type tells your payment system whether to authorize, capture, refund, or take another action on that event.

The transaction type determines what your payment system does next, and an authorization alone is not a completed payment.

Common card transaction types

A sale combines authorization and capture, so the system approves and completes the purchase in one operation. An authorization followed by a separate capture is useful when you need to confirm the amount before completing payment. A pre-authorization reserves funds without charging the card until you capture it.

Other operations handle changes after the initial payment. A refund returns captured funds, while a void attempts to cancel an authorization or stop a transfer before it completes. A verification checks account details before a later payment. Names and available options differ between payment systems, so the label alone does not guarantee the same workflow everywhere.

Why the type matters for funding and risk

An authorization is not settled money. Funds move after capture and settlement, so a sale left at authorization can delay the deposit you expect. For a hotel or car rental, a pre-authorization can hold funds while the final amount is unknown, but you must capture it before the applicable closeout process to start funding.

The captured amount also matters. Capturing a different amount from the authorized amount can affect chargeback protection. Refunds normally cannot exceed the captured amount unless the payment system allows an excess refund. The transaction type itself has no single standard fee; card type, payment channel, and the processing terms affect your costs.

What you can actually change

You control the operation your point-of-sale system or payment integration sends, and the checks your staff performs before closing a batch. Match each operation to the sale, hold, or refund you intend.

• Use a sale for a purchase you are ready to authorize and complete in one step.
• For a hold, record the authorization and complete capture before the required closeout.
• Check the returned status after payment, capture, void, and refund operations.
• Reconcile captured amounts and refunds against your order records and deposit reports.

1. 01
   Map your workflow. Write down whether each checkout, deposit, or hold needs an authorization, immediate capture, or later capture.
2. 02
   Verify payment status. Train staff to confirm the payment is captured or closed before treating it as completed.
3. 03
   Match your records. Compare each captured amount and refund with the customer order and the funding report.

Frequently asked questions