Authorization / Clearing / Settlement

Authorization reserves funds (real-time, ISO 8583 0100/0110). Clearing exchanges transaction details in batch files (TC05, TC06). Settlement moves money between acquirer and issuer via card networks. Auth can succeed but clearing fail if merchant data is wrong.

// Phase 1: AUTHORIZATION (real-time)
POST /authorize → ISO 8583 0100 → 0110 (DE39=00)
  → Hold placed on cardholder account

// Phase 2: CLEARING (batch, end of day)
Capture file → Interchange fee calc → TC records
  → Matched to original auth via RRN + STAN

// Phase 3: SETTLEMENT (T+1/T+2)
Network settlement report → Acquirer pays merchant
  → Issuer pays acquirer (net of interchange)

// Spring — auth vs capture
@Service
public class AuthCaptureService {
  public AuthResult authorize(Order order) { /* hold funds */ }
  public CaptureResult capture(String authId, BigDecimal amount) {
    // Partial capture allowed; release unused hold
  }
}