Partial Authorization

Partial authorization is a card-payment feature in which the issuer approves a smaller amount than the merchant asked for, rather than declining the whole payment authorization. It is used mainly with prepaid cards, gift cards and debit cards whose available balance is lower than the purchase. The merchant accepts the approved part on the card and asks the customer to pay the remainder by another method, a practice known as split tender.

The feature needs support from every party: the card issuer must be able to return an approved amount lower than the request, and the merchant's terminal and acquirer must be able to read it. Visa's published guidance requires all Visa prepaid issuers and acquirers to support partial authorization, and it is required for US automated fuel dispensers that use real-time clearing. It differs from incremental authorization, which adds to an existing approval instead of approving less.

Imagine you hand a shop assistant a gift voucher for a pair of shoes, but the voucher only has part of the price left on it. A rigid shop would hand the voucher back and say "not enough, sorry". A helpful shop takes what the voucher is worth and lets you pay the rest in cash.

Partial authorization is the helpful shop, built into the card system. When a card has less money on it than the bill, the bank says "I can cover this much" instead of "no". The till then shows how much is still owed, and the customer pays that part with a second card or cash. The customer leaves with the goods, the card is used up, and nobody has to guess the balance in advance.

At checkout, the terminal sends an authorization request for the full amount and flags that it can accept a partial approval. If the card's available balance is short, the issuer returns an approval with a specific response code and an approved amount. The merchant system then works out the remainder:

• $R$ is the remaining amount the customer must pay by another method.
• $P$ is the purchase amount requested.
• $A$ is the amount approved by the issuer.

For example, a customer buys groceries for $82.50 with a prepaid card holding $60.00. The issuer approves $A = 60$, so $R = 82.50 - 60.00 = 22.50$. The point-of-sale till prompts for $22.50, which the customer pays with a debit card. If the customer decides not to finish the purchase, the merchant must send a payment authorization reversal for the $60.00 so the funds on the prepaid card are released.

If the terminal does not flag partial-approval support, the issuer normally declines the request outright, typically as insufficient funds, which is one form of soft decline.

• Prepaid and gift cards. A prepaid gift card often has an odd balance left after earlier purchases. Partial approval lets holders spend it down to zero, which reduces leftover value and customer frustration.
• Automated fuel dispensers. At a pump, the terminal requests an estimated amount before fuelling. With partial approval, a card with a low balance can still be used, and the pump stops at the approved amount.
• Supermarkets and pharmacies. High-volume retailers with many prepaid or benefit cardholders use split tender to avoid lost sales at the till.
• Self-service and unattended machines. Kiosks and vending equipment can cap a service, such as charging time or a car wash, to the approved value.

Partial approvals are rare in e-commerce payments, because most online checkouts are not built to collect a second payment method for the same order. Some marketplaces and wallet providers do support split payment, but it is less common than at physical points of sale.

For merchants, the main benefit is fewer abandoned purchases. A declined prepaid card often means the customer leaves; a partial approval turns that into a sale. For issuers and program managers, it lets cardholders use their full balance and can lower calls about unexplained declines. It also matches the logic of prepaid access products, where the card should never spend more than the value loaded.

The drawbacks are operational. Point-of-sale software must handle split tender cleanly, including refunds that may need to go back to two different methods. Staff need training so that the remaining balance is collected rather than missed. If the second payment fails and the merchant forgets to reverse the first, the cardholder's funds stay held. Partial approval can also complicate reconciliation and reporting, since one sale now carries two or more payment records.

Partial authorization changes the size of a single approval downwards, at the issuer's choice. Incremental authorization raises an existing approval at the merchant's request when costs grow, as in hotels and car hire. A partial reversal, by contrast, is sent by the merchant to release part of an amount that was approved in full. All three aim at the same goal, keeping the hold on the cardholder's account close to what will actually be charged, and networks monitor merchants and acquirers on how well they achieve it. Partial approval is also separate from instalment plans, which spread one approved amount over time rather than splitting it between payment methods.

• Visa
• Mastercard