What is a credit card authorization form?
A credit card authorization form is an official form used to authorize a cardholder’s credit card. It is a formal document signed by a cardholder to grant a merchant or credit card provider permission to charge their credit card accordingly, be it monthly or yearly. By signing a credit card authorization form, a merchant is then authorized by the cardholder to use their credit card to make pre-approved purchases or donations. A credit card authorization may also be used to process payments by a card holder even if they do not have their credit card on hand and can therefore be considered an appropriate substitute for a credit card. Additionally, a credit card authorization form is used to protect merchants or credit card providers from fraud and prevent chargebacks. Also known as a refund, a chargeback is the reversal of a credit card purchase by the cardholder’s bank. Chargebacks and disputed funds cause lots of problems for businesses, since they are held from the business and can involve lots of grueling paperwork. Because it is a signed document from a cardholder that gives permission to charge their card, credit card authorizations can thus be used to prevent chargebacks and protect merchants in more ways than one.
What is included in a credit card authorization form?
Credit card authorization forms aren’t as complicated as they seem. A credit card authorization typically contains the following elements: the cardholder’s credit card information, which includes card type (e.g. Visa, Mastercard), card number, their name as shown on the card, and the card expiration date; the cardholder’s billing address; merchant’s business information; an authorized statement including the cardholder’s name and business name; the language used to authorize the merchant to charge the customer’s card on file; the name and signature of the cardholder; and the date. A credit card authorization form must be signed and dated in order for it to be considered valid by the banks involved. If you decide to use this free Credit Card Authorization Form, all the required elements as listed above will already be available on the template. To make the form more personalized for your company, all you have to do is customize the form to match your exact business needs with our drag-and-drop Form Builder. You can even upload your merchant or bank logo to give it a more professional touch! And you won’t even have to do any coding to make modifications to the Credit Card Authorization Form template.
How does credit card authorization work?
Credit card authorization is the first step when a customer makes a purchase. Once a customer pays for specific goods or services using their credit card, the merchant must send a request to the customer’s bank or credit card processor, also known as an acquirer, to review the customer’s account and determine if there are enough existing funds to successfully complete the transaction. If the request is approved, the merchant simply has to wait for the transaction to settle, which will be signaled by an approval code. However, the merchant also has the option to place an authorization hold that reduces the customer’s credit line, locking the funds for the transaction and ensuring that they will get paid for their goods or services. For credit cards, authorization holds may last as long as one month. If a credit card is declined due to incorrect card information, insufficient funds, international charges, or technical issues, the merchant will receive an error code and the transaction will be incomplete.
Are credit card authorization forms safe?
Credit card authorization forms are designed to protect merchants and buyers from fraud — but are they really all that safe? Since credit card authorization forms are required to gather sensitive cardholder information — such as a customer’s full name, billing address, credit card details, CVV, and signature — they need to guarantee protection otherwise this sensitive information could fall into the wrong hands and result in unauthorized transactions. Online credit card authorizations forms are considered to be far more secure than paper credit card authorization forms, which are easily accessible if not stored properly. If you choose to use this free online Credit Card Authorization Form, submitted cardholder data will automatically be kept safe due to Jotform’s PCI compliance, the highest level of security for businesses that accept credit card payments for online transactions. Jotform is also GDPR compliant and CCPA compliant, so you and your customers can rest easy knowing that sensitive cardholder information will be protected with the utmost security. You’ll also have the option to encrypt your credit card authorization form, meaning that you and only you will have access to submissions and any sensitive cardholder details they may contain. Keep in mind that you will not be able to legally record a customer’s CVV on this Credit Card Authorization Form because it is a violation of PCI standards. You can learn more about Jotform security here.
When should credit card authorization forms be used?
Businesses may need to receive authorization for credit card payments for several reasons. The first reason is for online transactions. Transactions that are completed online when the business doesn’t have access to the physical card itself may require prior authorization in order to be processed. If customers are placing orders for products, booking services that require them to pay fees, or subscribing to one-off or monthly donations for a charitable cause, the customer must first provide authorization for the business or nonprofit to process payments using their credit card information. Another reason that a credit card authorization form may need to be used is when businesses — such as hotels, motels, car rental companies, van rental companies, and more — require prior authorization to process payments at a later date for additional fees or damages. This is because the payment amount may change based on things like physical damage to a vehicle, room damages for a hotel or motel, etc. The final and most common use for credit card authorization is for recurring payments, subscriptions, or donations. If an organization needs to process repeat transactions on a weekly, monthly, quarterly, or yearly basis, they must get prior authorization from the credit card holder. Once this authorization is obtained through a credit card authorization form and a signature has been collected, the organization is free to process repeat payments for subscription-based products, services, or donations.
What are the advantages of using a credit card authorization form?
Credit card authorization forms serve a variety of purposes, and provide many benefits for both the cardholder and the organization collecting the authorization. Firstly, the use of these forms help businesses make recurring payments or delayed payments more efficient. By collecting customer and payment information at the same time — including card details, contact details, and more — the business can reduce back-and-forth emails or phone calls with their customers and instead seamlessly receive the information to arrange payments online. It helps to automate an otherwise manual process, meaning the business spends less time on paperwork and can spend more time working on growing their business. Another advantage from the business’ perspective is that they can use their signed credit card authorization forms to reduce and dispute chargebacks. When a customer tries to use chargebacks to scam a business, the business will already have a pre-signed document on file saying that they had the right to charge the customer’s card as they did, helping to protect them legally from losing their money. From the customer’s perspective, a benefit of signing a credit card authorization form can be the peace of mind at knowing their cardholder information is securely stored online — especially when the authorization is processed on Jotform, which protects cardholder data with PCI compliance, GDPR compliance, CCPA compliance, and other advanced security measures. With all of these advantages in mind, a credit card authorization form is the way to go when processing recurring payments or future payments for your customers or donors.