Visa's Misuse of Authorization Fee


As of October 1st 2009 Visa has started to charge a fee of $.045 per misused authorization.

Visa defines a misused authorization as:

Authorizations that are not followed by a matching clearing transaction (or in the case of a cancelled or timed out authorization, not properly reversed)

For MOTO and e-commerce merchants who use payment gateways there may be some changes to how they perform Auth and Capture type of transactions, especially if they Authorize the transaction at order time, and later Capture or Complete the transaction when they ship a product. Or more typically, perform a $1.00 authorization first with AVS and CVV2 data, and followed by an authorization for the total amount of purchase.

Many payment gateways may or may have authorization reversals, authorization voids, or other transaction types - you will need to work with your gateway to identify what transaction types need to be performed to “reverse” an authorization for a product that you do not ship. Or if your practice is to re-auth after 10 days, and let the original expire - you will be hit with the fee.

Visa also supports a new transaction type called Account Verification - which is a $0.00 authorization - which they hope merchants will used instead of misused authorizations.

For processors and large merchants with direct connections to Visanet or Payment Gateways - These entities will want to verify that their reversal processing addresses credit reversals in the time-out scenario.


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