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What are credit card authentication and its types?

Card authentication is distinct from card verification. Verification is merely adding a card as a payment method, while authentication is proving that you own the credit card. Before starting the authentication process, make sure that you have at least 2 USD left in your card’s limit or balance. We will trigger a fee amounting to 0-2 USD to your card. Which should emulated in your card transaction history or statement instantly or within up to 3 days. 

You need to enter the exact amount on the authentication page within 88 hours from the time you initiated card authentication for it to be successful. But if your credit card transaction authentication will fail, the transaction will be declined.

But if the card verification cannot be made during this time the authentication will fail. And the transaction will be declined. For example, if you use your credit card to pay for gas at the pump. You will likely be advised to input your billing address and Zip code. If you input the incorrect Zip code, the authentication will fail, and the transaction will be declined.

How does credit card authentication work?

Authorization is essential to check whether a cardholder’s credit card holds sufficient funds and is authorized to purchase from a merchant. A credit card authentication request first emerges whenever a cardholder attempts to purchase a good or service through a debit or credit card. The authorization request is first sent through the merchant’s acquiring bank to actuate the cardholder’s bank. When notified, the cardholder’s bank then arbitrates whether the transaction with the merchant will either be approved or declined based on the cardholder’s line of credit. After the acquiring bank formulate whether the cardholder holds sufficient funds or credit for the transaction. This information of whether the transaction was declined or approved travels back through the acquiring bank to the merchant. If the transaction is approved. Then the amount of the transaction is deducted from the cardholder’s account, and the cardholder is given a receipt. 

Types of credit card authentication

There are four feasible methods for credit card authentication such as –

. Knowledge 

Credit card authentication by knowledge is done by authenticating that the customer knows something only the cardholder would know. For example, an online store may need you to input a password analogous to the card that only you have. The cardholder would know before completing your credit card transaction. 

. Inherence

Inherence is done by authenticating that the customer has attributes that are inherent to the cardholder and the cardholder only. For example, a merchant may use your biometric information. Such as fingerprint, facial, palm, or voice recognition, to authenticate that you are, indeed, the cardholder.

. Ownership

Credit card authentication by ownership (or possession) is done by verifying that the customer has something that only the cardholder would have. For example, an online store may require you to input a code sent to your mobile phone before completing your credit card transaction. Signing a receipt is another form of ownership-based authentication. Although signature-based authentication is increasingly being viewed as an out-of-date form of authentication. 

. User Location

Credit card authentication by location is done by comparing the location where a credit card is being used to the customer’s billing address. Where they customarily use their credit card. For example, if you customarily use your card in California. A charge on the card in Los Angeles could fail to authenticate, in which case the transaction would be declined. If you plan on traveling abroad, make sure you disclose to your credit card issuer where you are going so that your card is not declined due to authentication issues.

As technology moves ahead, so do card authentication methods. For example, signing credit card receipts and even password input are increasingly being recognized as out-of-date forms of authentication, while advanced technologies, such as biometric identification, are increasingly being adopted. 


Most of the time, the credit card authentication step is a fleeting and unremarkable part of processing a transaction. The majority of cards will pass authorization without incident, and customers who are told that their card has been declined usually have alternate payment methods they can use. For more information contact us at 5 Star Processing.

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