Authorization and capture

PayPal authorization and capture is a settlement solution that provides increased flexibility in obtaining payments from buyers. During a traditional sale, the authorization and capture occurs at the same time as the sale. However, you use an explicit authorization and capture call to separate the payment authorization from the capture of the authorized payment.

With authorization and capture, you typically take a $1 USD authorization at checkout and delay the order fulfillment process. If the amount due for the order changes due to taxes, shipping costs, or item availability, you can modify the original authorization amount.

The PayPal website supports processing only basic authorizations. To capture and void orders and authorizations, you must use the Authorization and Capture APIs.

Note: Not all funding sources support authorization and capture models. PayPal Risk reserves the right to block successful capture transactions against authorizations. You cannot capture funds if a buyer's account is restricted or locked, a fraudulent case occurs, or your account has a high restriction level.

Basic authorization process

Authorization and capture starts when your buyer authorizes a payment amount during checkout. For example:

  1. You send your buyer through the payment flow and pass the paymentaction variable, which you set to authorization or order.

  2. After your buyer completes checkout, use the payment's transaction ID with authorization and capture in the PayPal website. From the website, you can:

    • Capture a partial or full authorization amount.
    • Authorize a higher amount, up to 115% of the originally authorized amount (not to exceed an increase of $75 USD).
    • Void a previous authorization.

Honor period and authorization period

Authorization and capture includes these time periods:

  • A 29-day valid period that begins when the buyer authorizes the payment. During this period, the authorization places the buyer's balance on hold to ensure that the payment amount is available for capture.

  • A three-day honor period, which is from day one to day three of the authorization period. After most successful authorizations, PayPal honors 100% of authorized funds during the honor period. A day starts at 12AM PST and ends at 11:59PM PST on the calendar day when the authorization occurs.

Note: Buyers and merchants cannot close accounts that have pending authorizations.

Re-authorizations

Within a 29-day authorization period, you can issue multiple re-authorizations after the initial three-day honor period expires.

Day Action Authorization period Honor period
Day 1 Authorization-1 Begins 29-day authorization period Days 1 through 3
Day 4 Reauthorization-1 on Authorization-1 Within 29-day authorization period Days 4 through 7
Day 8 Reauthorization-2 on Authorization-1 Within 29-day authorization period Days 8 through 11

Note: To issue multiple re-authorizations, use the DoAuthorization NVP/SOAP and DoCapture NVP/SOAP API calls.

If you try to capture funds without an authorization after the honor period expires, PayPal cannot ensure that 100% of the funds are still available.

Supported PayPal products

You can use authorization and capture with these PayPal products:

  • Website Payments
  • Buy Now
  • Donations
  • Shopping carts

By default, these products assume that a transaction is a final sale. You must explicitly set paymentaction to specify a basic or order authorization.

Basic example scenarios

Capture a single authorization

If you have authorized a transaction, you need to capture the funds in order to receive payment.

Note: PayPal recommends that you capture payments within three days of the original authorization.

To initiate a capture:

  1. Log in to your PayPal account.

  2. Click the History subtab.

    The History page appears.

  3. Find the payment transaction you want to capture and click the Capture button associated with the transaction. The Capture Funds page appears.

  4. Review the information, enter the amount to capture, and then click the Capture Funds button. The funds are transferred to your account.

Batch capture multiple authorizations

You can initiate the capture of an entire group of authorized transactions at the same time. This feature is known as batch capture.

To capture a batch of authorized transactions:

  1. Log in to your PayPal account.

  2. Click the History subtab. The History page appears.

  3. Click the Capture button associated with any transaction.

    The Capture Funds page appears.

  4. Click the Batch Capture link that is located in the introductory paragraph.

  5. On the displayed page, either use the dropdown menu to choose a defined date or date range, or enter a specific date range in the provided fields.

  6. On the displayed page, check the authorizations you want to capture, set their capture amount, choose whether you will make an additional capture later, and optionally enter a note to the buyer.

  7. Review the capture transactions, make any desired changes, and submit them for processing.

Void an authorization

If you initiated an authorization and now want to refund the buyer, you need to void the authorization. Once you void an authorization, you cannot capture any funds associated with the authorization, and the funds are returned to the buyer.

Note: Voiding an authorization cancels the entire open amount.

You can initiate a void in the following cases:

  • The authorization is pending
  • The authorized amount was captured at less than 100%

To void an authorization:

  1. Click the Void button associated with the authorization.

  2. Confirm the void details on the Void Authorization page, and then click the Void button.

    Note: PayPal recommends that you explain any unique circumstance to your buyer in the Note field.

    PayPal sends the buyer an email with the details of the voided authorization.

Capture within 3 days

  1. Your buyer orders a camera from your website.

  2. Your buyer enters payment information and authorizes payment.

  3. Send your buyer to PayPal using a hosted flow, specifying the variable paymentaction=authorization.

  4. PayPal initiates the authorization.

  5. On day 3, capture funds and ship the camera.

    After you have captured funds, your Transaction Details shows the transaction with a Completed status.

Capture from 4 to 29 days

  1. Your buyer orders a DVD player from your website.

  2. Send your buyer to PayPal using a hosted flow, specifying the variable paymentaction=authorization.

  3. Your buyer enters payment information and authorizes payment.

  4. PayPal initiates the authorization.

  5. The DVD player is discontinued. You order a different DVD player from your vendor and notify your buyer of the change.

  6. On day 14, the DVD player arrives from your vendor. Since the honor period has expired, ensure the funds are available by performing a reauthorization. On successful reauthorization, perform a capture and ship the DVD player.

    Your Transaction Details shows that the transaction has been completed.

One authorization, multiple captures, and a refund

  1. Your buyer orders two textbooks and a keyboard from your website.

  2. Your buyer enters payment information and authorizes payment.

  3. Send your buyer to PayPal using a hosted flow, specifying the variable paymentaction=authorization.

  4. PayPal initiates the authorization.

  5. One textbook and the keyboard are out of stock. You order additional inventory from your vendors. Perform the first partial capture and ship the in-stock textbook on day 6.

  6. You receive the second textbook from the vendor. Perform the second partial capture and ship the textbook on day 11.

  7. You receive the keyboard from the vendor. You reauthorize for payment on day 19.

  8. Your buyer files a complaint that the textbook from the first shipment is damaged. You issue a partial refund for the first capture.

    Your Transaction Details shows the following:

Lower capture amount

  1. Your buyer orders a laser printer and a USB cable from your website.

  2. Your buyer enters payment information and authorizes payment.

  3. Send your buyer to PayPal using a hosted flow, specifying the variable paymentaction=authorization.

  4. PayPal initiates the authorization.

  5. Before you process the transaction, your buyer contacts you and requests to cancel the USB cable from the order.

  6. On day 6, complete a partial capture for the specific amount against the authorization and ship the laser printer.

  7. You complete a void on the funds remaining on the authorization.

    Your Transaction Details shows the following:

Capture up to 115 percent

  1. Your buyer places an order from your website.

  2. Your buyer enters payment information and authorizes payment.

  3. Send your buyer to PayPal using a hosted flow, specifying the variable paymentaction=authorization.

  4. PayPal initiates the authorization.

  5. You add shipping charges to the order and capture funds on day 1.

    Your Transaction Details shows the completed transaction. The capture results in a total not greater than 115% of the original authorization.

Authorization expires

  1. Your buyer orders a desktop computer from your website.

  2. Your buyer enters payment information and authorizes payment.

  3. Send your buyer to PayPal using a hosted flow, specifying the variable paymentaction=authorization.

  4. PayPal initiates the authorization.

  5. Before you process the transaction, your buyer contacts you to cancel the order.

  6. You do not capture funds for the transaction.

  7. The authorization expires.

    Your Transaction Details shows the authorization with an Expired status.

Void

  1. Your buyer orders a stereo system from your website.

  2. Your buyer enters payment information and authorizes payment.

  3. Send your buyer to PayPal using a hosted flow, specifying the variable paymentaction=authorization.

  4. PayPal initiates the authorization.

  5. Before you process the transaction, your buyer contacts you to cancel the order.

  6. You void the transaction.

    Your History shows the transaction with a Voided status.

Reattempted capture

  1. Your buyer orders two sweatshirts from your website.

  2. Your buyer enters payment information and authorizes payment.

  3. Send your buyer to PayPal using a hosted flow, specifying the variable paymentaction=authorization.

  4. PayPal initiates the authorization.

  5. On day 3, you attempt to capture funds, but the capture fails. You receive an error message similar to the following:

    We are sorry, we cannot process the settlement at this time.
    

    There was a restriction on the buyer's account.

  6. You contact the buyer to resolve the problem.

  7. Your buyer resolves the account problem.

  8. You reattempt and successfully capture funds. You ship the order to your buyer.

Note: The reauthorization scenario is similar to the Reattempted Capture scenario, as detailed above.

Best practice recommendations

Capture funds on basic authorizations

PayPal recommends that you capture funds within the honor period of three days because PayPal will honor the funds for a 3-day period after the basic authorization. If you attempt to capture funds after the 3-day period and the authorization fails, your request to capture funds may be declined.

After day 4 of the authorization period, you can initiate a reauthorization, which will start a new 3-day honor period. However, it will not extend the original authorization period past 29 days. For example, if you successfully complete a reauthorization on day 29 of the authorization period, funds will only be honored until the end of the 29th day, and a new 3-day honor period will start but not extend beyond day 29.

You should ship your buyer’s order immediately after the capture.

Buyer approval for basic authorizations

A buyer-initiated authorization allows you to capture funds from the buyer's account up to 115% of the originally authorized amount (not to exceed an increase of $75 USD) and up to $10,000 USD.

Important: If you want to update any details of the purchase that change the original authorization amount, PayPal requires that you obtain consent from the buyer at the time of purchase or at the time of capture.

Voiding basic authorizations

You should void an authorization if the authorization or reauthorization will not be used. Voiding the authorization unlocks the temporary hold placed on your buyer's funding sources.