Partial Approval

Partial approval, also called partial authorisation, is a response to a card authorisation request in which the issuer approves a smaller amount than the merchant asked for. It happens most often when a cardholder tries to pay with a prepaid card, gift card or debit card whose available balance is less than the purchase total. Instead of declining the payment outright, the issuer approves the amount that is available, and the merchant collects the rest by another means, such as cash or a second card.

Partial approval is a feature of payment authorisation that both the merchant's system and the issuer must support. If the merchant's terminal does not indicate support, the issuer will normally decline a transaction for which there are insufficient funds rather than approve part of it. The feature is distinct from partial capture, in which the merchant chooses to collect less than an amount that was fully approved.

The process usually runs as follows:

1. The merchant's terminal or payment system sends an authorisation request for the full amount, with a flag showing that it can accept a partial approval.
2. The issuer checks the account. If the balance covers the full amount, it approves in full. If the balance is lower but above zero, it can approve the available amount.
3. The authorisation response carries a specific partial approval code and the approved amount, which is less than the amount requested.
4. The terminal shows the approved amount and the remaining balance due. The cashier or customer then pays the remainder with another tender, a practice known as split tender.
5. If the customer cannot or does not want to pay the rest, the merchant must cancel the sale and send an authorisation reversal for the approved amount, so that the funds are released.

Partial approval helps cardholders with limited balances, who often do not know exactly how much remains on a prepaid or gift card. Without it, they would face repeated declines and might need to call the issuer or use a balance check to find out how much they could spend. For merchants, accepting part of a payment is better than losing the sale entirely, and it reduces queues at the checkout.

The feature also matters in settings where the final amount is unknown when authorisation is requested. At automated fuel dispensers, for example, the terminal requests an amount before fuelling begins. If the card has less available, a partial approval tells the pump how much fuel it may dispense, preventing the cardholder from spending more than is in the account.

Card networks have long promoted partial approval for prepaid and debit cards, and their card network rules require it in certain merchant categories and regions, especially where prepaid card use is common. Issuers of prepaid products are generally expected to support it. Merchants and their acquirers must also follow rules on what to do after a partial approval, including reversing approvals when a sale is cancelled and correctly recording the approved amount in clearing.

In technical terms, partial approval is handled through specific fields and response codes in the card authorisation message standards, and each network sets out the exact data elements to be used.

To use partial approval, merchants need point-of-sale software that can:

• Signal support for partial approval in the authorisation request.
• Recognise a partial approval response and show the remaining amount clearly to the cashier and customer.
• Accept a second payment method for the balance and link both payments to one sale.
• Reverse the partial amount automatically if the sale is abandoned.

Online merchants support partial approval less often, because it is harder to ask a customer for a second payment method during an online checkout. Some e-commerce platforms instead check gift card balances first and apply them before charging a main card.

The main operational risk is failing to reverse a partial approval when a sale does not go ahead. The cardholder's funds then remain held as an authorisation hold until it expires, which can cause complaints, especially for customers with low balances. Poorly designed terminal screens can confuse staff, leading to the full amount being treated as paid. Partial approvals also complicate reconciliation, since one sale may be settled in several parts across different payment methods. Fraudsters sometimes use partial approvals to drain small balances on stolen gift cards, so issuers monitor patterns of repeated small partial approvals across many cards.