📄 Guide
Understanding a transaction’s full journey from authorization to settlement helps you reconcile correctly and present transactions and balances to your customers accurately. A transaction passes first through authorization, then through clearing / settlement, typically hours to days apart.
Two stages and four branches
- Authorization. When the cardholder pays, DCS checks the entity’s status, the velocity rules and the available balance in real time; on approval it holds the amount and consumes the corresponding limit quota. No money has actually left yet — the transaction appears on the statement as an authorization hold (
postStatus=UNPOSTED). - Clearing / settlement. When the merchant later clears, DCS debits the actual settled amount and posts it (
postStatus=POSTED); the transaction lands on the statement for its cycle. The settled amount can differ from the authorized amount (tips, FX differences, or the merchant charging less). - Reversal / void. If an authorization is canceled before settlement, DCS releases the held amount along the original path and restores the consumed limit quota, leaving no residue.
- Refund / chargeback. A refund is processed as a separate posting in the opposite direction and does not retroactively unwind historical limit counts; a chargeback is tracked through the dispute process to closure.
- Debt. Under delayed settlement or merchant over-capture, the available balance can be driven negative; the account then enters a debt state and the partner is notified by event. The partner repays on schedule.
Next steps
- The payloads of the authorization and settlement events, and how to consume them: Real-time authorization and settlement
- How limits take part in authorization, and how statements read: Limits and statements