Authorize vs. authorize and capture is a topic that many eCommerce merchants aren’t used to at first, so here’s a breakdown.
Many brick-and-mortar stores are no stranger to authorizing a charge then capturing at a later time. For example, let’s say you’re filling up your gas tank. The gas station usually authorizes a charge greater than the typical price of a full tank (usually $100, which sometimes irritates people at first). Authorizing doesn’t actually charge the customer; it simply verifies the customer is able to pay the total cost based on funds available or the customer’s credit limit. Authorizing a charge is usually valid for a period of 10 days, but this varies depending on several factors, such as which type of card is used.
Once the total price is known, then the charge can be captured, which actually results in a payment from the customer. The capture is what transfers the money to the merchant’s account and finalizes the charge against the customer’s credit. Typically merchant accounts will allow any charge lower than, or up to, the authorization amount (which is why many gas stations authorize such a large amount). If you authorize and capture, these two processes happen at the same time and you don’t have to manually capture the charge at a later time.
So how does this relate to eCommerce? The easiest example I can give you is Amazon. When you place an order with Amazon, the total amount for the order is authorized on your card. However, that charge isn’t actually captured until the order is shipped and on its way to you. Many eCommerce merchants like to replicate this practice in case an order is cancelled before shipping, which is why they like payment integrations that allow you to first authorize charges rather than simultaneously capture them.