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Handouts in Authorization of Payments

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Mia Bert Nunag Gabawa
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23 views4 pages

Handouts in Authorization of Payments

Uploaded by

Mia Bert Nunag Gabawa
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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NAME: SHARLENE MAE T.

INON
SEMESTER: SUMMER 2022
COURSE: School Finance and Business Administration
PROFESSOR: ELEANORE DAGALA, PHD
TOPIC: Administration of Budget
*Authorization of Payment
*Making Payments

Payment - it is the action or process of paying someone or something or of being paid.


It is an amount paid or payable.

Authorization – it is the process of giving someone permission to do or have something.

Authorization – is a process by which a server determines if the client has permission to use a resource
or access a file. It is usually coupled with authentication so that the server has some concept
of who the client is that is requesting access.

Why do we need Payment Authorization?


It helps us confirm and verify whatever details agreed upon with our customer. It certainly
established validity when assessing debits against a particular card or bank account.

What does Payment Authorization mean?


Is a process through which the amount to be paid on a payment method is verified. In case
of credit cards, authorization specifically involves contacting the payment system and
blocking the required amount of funds against the credit card.

Payment Authorization is a kind of an approach which guarantees evidence that the certain
account is valid and adequately provisioned inquiry can be approved.

Authorization Process

1. Expiration Date – The authorization acquired for customer accounts do not have an expiration date.
2. Dynamic charge transaction request (CTR) distribution – provides customer intelligent control of
authorizations, multiple invoices, and multiple payments.
3. Sequence of authorization requests – each authorization request contain a MaxRequestAmount
attribute, which defines the total authorization required for that request. When a request is fully
authorized, the authorization for the next request begins.
4. Payment Status – Each authorization request has a payment status associated with the request.
5. Reversal of authorization – Enables merchants to implement an authorization strategy that
generates a reversal request before the unused authorization expires.
6. Delayed reauthorization – When an order is awaiting inventory, authorizations can expire and
trigger multiple reauthorization that lock up the customer’s credit line and cause expense to the
seller.

Advantages of a Payment Authorization Form


1. Minimize Fraud and Chargebacks
2. Minimize Errors
3. Establish Positive Merchant Reputation

Making Payments
Payments- is a voluntary tender of money or its equivalent or of things of value by one party to another in
exchange for goods, or services provided by them or to fulfill a legal obligation. The party making
the payment is commonly called the payer, while the payee is the party receiving the payment.
(Wikipedia)

Payment – is the transfer of money, goods, or services in exchange for goods and services in acceptable
proportions that have been previously agreed upon by all parties involved.

Procedures for Making Payment


1. Payment by Cash
A cash payment is bills or coins paid by the recipient of goods or services to the provider.

2. Payment by Bank Transfer


A bank transfer, also called a wire transfer, is a way to send money from one bank account
to another anywhere in the world.

3. Payment by Cheque
A cheque is a written "order to pay", which you sign and give to another party as payment.

4. Bank Draft
A check drawn by a bank on its own funds in another bank.

5. E-Payment
An e-payment or Electronic Payment system allows customers to pay for the services via
electronic methods. It is also known as online payment systems. Normally e-payment is
done via debit, credit cards, direct bank deposits, and e-checks, other alternative e-payment
methods like e-wallets, bitcoin, cryptocurrencies, bank transfers are also gaining popularity.
Advantages and Disadvantages of Common Methods used in Payments

Advantages Disadvantage

One of the most common and Customers might not want to


Cash
easiest forms of payment make large purchases with cash

Many customers will expect you


Storing cash to your place of
to accept cash.
business or home, or
transporting to the bank, can be
You won’t have to pay any fees dangerous.
to accept cash.
After depositing a check you’ll
May lead customers to make
need to wait for the bank to
Cheque more frequent or larger
process the check and pay the
purchases
money in your account.
You won’t have to keep as much
cash n you store.
There’s a risk that someone will
try to pay with a fake check.
You won’t have to pay any fees
to accept checks.
You’ll have to wait for the
Can be quicker and more transaction to process before
Debit, Credit and Prepaid Cards convenient for customers at getting money in your account.
checkout than cash or cheque. This usually takes between one
and three days.

You don’t have to worry about


bad cheque or fake cash. You may have to pay transaction
fee, a small percentage of the
transaction. Generally have
Allows foreign travelers to more lower fees.
easily make purchases.

You may be responsible if a


Mobile payments may be more
customer uses a fake or stolen
Mobile payments reliable than card-based
payment information make a
transactions in some areas.
purchase.
If a customer disputes a charge
Allows foreign travelers to more (i.e. initiates a “chargeback”, the
easily make purchases. transaction may be reversed and
you won’t receive a payment.
Non-business customers might
Allow you to receive large not feel comfortable transferring
E-payments
payments without paying fees. money direct from their bank
account to you business.

You don’t have to worry about


bad cheque or fake cash. You may need to set up this type
of transaction with your bank
and the customer’s bank, which
Could be a good option if you isn’t always easy.
sell products or services to other
businesses.

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