Deferred Authorization: Taking a Sale When the Network Is Down

Deferred authorization is the rule that covers the moment your terminal cannot reach the network. The sale is in front of you, the card is in the reader, and nothing is going out. The rules do allow you to complete it, and they attach a clock and a flag to doing so.

Here is what the rule actually requires, and the three other cases where an approval is not needed first.

The default is an approval before you complete#

Section 5.7.3.4 of the Visa Core Rules (ID# 0031021) states the baseline plainly. A merchant must obtain an approval response before completing a transaction, unless one of four things applies:

• The amount is below an applicable floor limit
• An authorization request cannot be submitted at the time of the transaction
• It is an in-transit transaction, where authorization must be obtained within 24 hours of the passenger vehicle reaching its final destination
• It is a mobility and transport transaction meeting the resubmission requirements in Section 7.3.6.2

The section closes with a line worth remembering: an approval response obtained in accordance with the Visa Rules constitutes a valid authorization. What you got properly, you keep.

Floor limits are their own subject, and most merchants cannot look theirs up. That is covered in floor limits and what they decide.

The outage case, and its two obligations#

The second exception is the one that applies to an ordinary shop with a dead connection. Section 5.7.3.3 (ID# 0030061) sets out what you owe when a transaction cannot be submitted at the time due to a connectivity or system issue or other limitations. There are two obligations, and both are required:

Include a deferred Authorization indicator in the Authorization Request

Request an Authorization as follows: For MCC 4111, MCC 4112, or MCC 4131, within 4 days of the Transaction Date ... For all other MCCs, within 24 hours of the Transaction Date

So: flag it, and send it within 24 hours.

The indicator is the part merchants never see and never think about, because it is set by the terminal or gateway rather than by a person. That is exactly why it is worth asking your provider whether your equipment sets it. A deferred transaction sent without the indicator is just a late authorization, and it does not carry the protection the rule is there to give.

Transit gets four days#

The longer window applies to three merchant category codes: 4111 local and suburban commuter transportation, 4112 passenger railways, and 4131 bus lines.

That is a narrow carve-out for a specific operational reality. Fare gates and onboard readers routinely run where there is no connection, and a 24 hour clock would not survive a vehicle in a tunnel or a rural route. If you are not in one of those three codes, your window is 24 hours regardless of how similar your situation feels.

What this does not give you#

It does not let you hold a transaction because you would rather send it later. The rule is written around a connectivity or system issue or other limitations, meaning something preventing submission rather than a choice to defer.

It does not turn a decline into an approval. If the deferred request comes back declined, you have an unpaid sale and a customer who has left, which is the risk you accepted when you completed without an approval.

And it does not replace a reversal. If you authorized and then need to undo it, that is a different mechanism with its own timing, covered in authorization reversals and the 24 hour rule.