Credit Card Authorization Form

A Credit Card Authorization Form is what a merchant, especially the ecommerce one, can use to accept a credit card with the expressed written consent of the cardholder for added security against chargeback.

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When you want your customer to pay with a credit card, you can ask for the authorization strictly online (or get them to swipe or tap the card in person) or back it up with a Credit Card Authorization Form. By asking your customer to read the terms and conditions on the form before signing, you are protecting your business against chargeback.

There are six types of authorization a Credit Card Authorization Form may include:

  • One-time: For making a single credit card payment (credit card number, expiration date, CCV code, and address of record).

  • Recurring: For a subscription service, usually on a weekly or monthly basis.

  • One-time ACH: A single payment via ACH transfer from a savings or checking account (routing and account numbers).

  • Recurring ACH: Multiple periodic payments with ACH transfer.

  • Airline: Used when buying air tickets in paper form.

  • Hotel: Needed when a hotel guest uses a 3rd party credit card to make a payment.

What Is a Credit Card Authorization Form?

A Credit Card Authorization Form allows merchants and businesses to charge for their goods and services without the cardholder's presence. By supplying their credit card information and signing the document, the cardholder authorizes the merchant to make a one-time charge or recurring charges. This form also serves as an additional layer of protection for the merchant against fraud and chargeback abuse.

Other Names for Credit Card Authorization Form

Depending on the context and preferred usage, the Credit Card Authorization Form may also be known as:

  • Credit Card (ACH) Authorization Form

  • Authorization for Credit Card Transactions

  • Credit Card Payment Authorization Form

  • Credit Card Transactions Authorization

Who Needs a Credit Card Authorization Form

All merchants benefit from the use of Credit Card Authorization Forms. The most significant advantage is that it simplifies the transaction and makes it more secure at the same time. The customer does not have to be physically present to make the purchase, and you can make sure they have read all the terms and conditions before authorizing the charge.

With the authorization in hand, a seller can check if the credit card has enough available credit to pay for the transaction. This form also prevents fraud and protects businesses by requiring the CCV code, mailing address of record, and cardholder signature.

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How to Create a Credit Card Authorization Form with 360 Legal Forms

The Credit Card Authorization Form is essential for all merchants. It allows you to charge credit cardholders and add a layer of protection. With 360 Legal Forms, you can create a document with everything needed to protect your business and enable a smooth money transfer.

Let 360 Legal Forms help with our extensive library of attorney-vetted legal forms. The process is fast and easy. All you have to do is fill out our easy-to-understand questionnaire. Once complete, simply download your form as a PDF or Word document from your secure online account.

What Information Will I Need to Create My Credit Card Authorization Form

Your document will contain these fields for your customer to fill out:

  • Business or Consumer: Business or individual buyer.

  • Name: Full name of the company or individual.

  • Cardholder identity: Name and address of the cardholder.

  • Card information: The card number and expiration date (you can tell the card type from the first digit of the card number, 3 for AMEX, 4 – Visa, 5 – Mastercard, 6 – Discover).

  • Authorization type: Select Credit Card or ACH transfer (if applicable).

  • Payment type: Either a one-time charge or recurring.

  • Payment details: The purpose of the authorization.

  • Delivery method: How the product or service will be delivered.

Credit Card Authorization Form Terms

  • One-time payment: A single charge, and that is it.

  • Recurring payment: Charged periodically, usually weekly or monthly. Recurring charges are typical for subscription services such as gym services, streaming services, and auto insurance payments.

  • ACH authorization: An ACH or Automated Clearing House transfer allows a merchant to electronically retrieve money from a bank account in the United States.

  • NSF fee: Only applicable to ACH, a Non-Sufficient Fund fee charged if the ACH transfer returns for NSF.

Credit Card Authorization Form Signing Requirements

The Credit Card Authorization Form needs to be signed by the credit cardholder after it is filled out.

What to Do with Your Credit Card Authorization Form

The credit cardholder should review the document and sign it, after which the merchant will verify if it is filled out correctly. Only the merchant must keep a copy of the document, but it may be a good idea for the cardholder to keep a copy too.

The Credit Card Authorization Form does not require notarization. It becomes legally binding after it is signed by the cardholder and submitted to the merchant.

Frequently Asked Questions

Merchants can use an authorization hold to reserve a product or service before delivering it. They would only put the charge through when the product or service is ready to be sent or delivered. It is also a way to protect against chargebacks, the repeated occurrences of which can result in the suspension of a merchant account. For example, you can put a hold on the card as you get your customer to fill out a credit card authorization form and put the charge through only when it is received and you are ready to ship the product. An authorization hold can last as long as 30 days for credit cards.

The authorization process ensures that the customer has enough credit on the credit card. If the authorization is successful, the merchant will still have to put the charge through (usually at the end of the day) to initiate the fund transfer. An authorization can fail for two reasons:

  1. Technical: If there is a technical problem, the merchant may have to work with the credit card processor to fix it.

  2. Financial: This is the most common error, indicating that something is wrong with the buyer's account, usually insufficient credit or account protection. You will have to ask your buyer to contact his or her credit card company to resolve this.

The main difference is that they are two different forms of payment. While they are both electronic funds transfer, one involves the buyer’s credit card account and the other the bank account. Unlike credit cards, ACH transfers do not require a mediator (such as the merchant account provider). With credit cards, the issuer of the card guarantees the payment. This institution will verify that the card has enough funds before approving the transaction. An ACH transfer is not guaranteed and may take several days to complete. The advantage of ACH is that the fees are much lower. The average credit card discount (fee to the merchant) is 2.5% of the transaction plus a processing fee for domestic cards (at least 1% higher for international cards). In contrast, the fee for an ACH transfer is fixed at $0.30, though there is usually a much higher fee if it is bounced (which varies according to the financial institution involved). A Credit Card Authorization Form usually allows for the use of both.

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