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Authorization Response Codes and How They Work

Credit card processing is a must if you want a business to succeed. Not offering your customers and clients the ability to pay with a credit card will mean lost business. The whole process may seem a little confusing at first, but as long as you understand how merchant accounts work, especially the authorization response codes you will receive, you will find that your business will benefit immensely.

The authorization response code is actually a code that is sent from the customer’s bank. The code tells you whether the transaction has been approved or declined. The most obvious reason that a transaction would be declined is that the customer is lacking the proper funds in their account. It would also be declined if the card had been reported stolen.

For successful credit card processing, it is important to be sure that your processor uses an address verification system. This is especially important when you conduct business online. This system verifies that the address used by the card user matches the address the issuing bank has in their system. If this address does not match, the transaction will be declined. This helps to prevent fraudulent card use.

Online business should also require the use of the CNP code. This code is a three-digit number listed on the back of the card. The Card Not Present code is a must when it comes to online business or business being conducted over the phone. If the customer does not have this code, the transaction should be declined, as it could very well be fraudulent usage.

Should your business receive a lot of fraudulent charges, you will find that your processing fees will go up. In fact, many specific types of business, such as an online casino, often have higher processing fees than other businesses due to the fact they are at a higher risk for fraudulent activity. By using the address verification system and the CNP code, you can actually reduce the amount of fraudulent credit card use. Merchant accounts may seem a little confusing, particularly for a new business owner, but they can be the difference between your success and your failure.


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