A card authorization form is used by businesses to obtain permission to charge a credit card without the cardholder’s presence. It is commonly used for large purchases or setting up subscriptions and recurring payments. Whether generated digitally or printed, these forms allow businesses to charge customers at a future date.
Digital authorization forms on e-commerce sites or for subscriptions allow customers to save their information securely on the website. Once a customer enters their credit card details, the platform generates a digital authorization form. This serves as consent for storing the information and processing payments in the future, whether it’s a one-time purchase, recurring subscription, or installment plan. By agreeing to the terms and conditions (usually at the “check out” stage), the customer gives explicit consent for processing payments.
Paper-based authorization forms, on the other hand, are manually filled out by the cardholder and authorize future transactions. They contain credit card details such as the card number, expiry date and name of the cardholder, as well as signatures to authorize the transactions. These forms are frequently used for post-charges, such as at hotels, where a card is authorized at check-in to cover future incidental costs. Or in car rentals, where additional charges like fuel or damages can be processed after the rental period ends. Once signed, the customer consents to these potential future charges, and businesses can complete the transaction remotely without the customer needing to revisit the location.
Paper-Based Payment Authorization vs Electronic Authorization
The following table highlights the key differences in the use cases and the medium of consent for these two authorizations.
| Aspect | Digital | Paper-Based |
| Medium of Consent | Electronic consent via secure online payment portals. | Physical signatures on paper forms. |
| Use cases | Mobile payments (e.g., Apple Pay, Google Wallet) Subscription services E-Commerce Transactions. | Car rentalsHotel check-insService agreements (e.g., repairs, installations) For Card-not-Present purchases, such as when payment is made through a business card or a family member’s card. |
| Transaction Nature | Completes the payment process. Can also be used to authorize recurring payments in the future. | Authorizes payment but does not complete the transaction. Authorization is used for payments in the future. |
| Intent | Grants permission for immediate or future payments. | Authorizes future charges for incidentals or services. |
The paper-based authorization thus differs from the electronic authorizations and is used in specific circumstances like hotel bookings, club memberships, and car rentals. They can also be used when a family member or employee needs to use the card without the cardholder being present. These forms are particularly useful for processing post-charges or recurring payments. Next, we discuss the various types of authorizations for handling payments in the future.
Types of Payment Authorizations
The authorization form can be used to consent to credit card charges or to directly deduct amounts from the customer’s bank account (ACH). You can request four types of authorization from your customers to process payments.
- One-Time Credit Card Authorization: It is an authorization for a charge to a credit card for a one-time payment.
- Recurring Credit Card Authorization: This authorization is needed to make recurring charges to a customer’s credit card.
- One-Time ACH Authorization: When requesting a one-time direct debit transaction from a customer’s bank account, you must request this authorization.
- Recurring ACH Authorization: If you want to bill your customers for recurring transactions by requesting payments directly from their bank accounts, you will need this authorization.
At WordLayouts, we have developed a template for the credit card authorization form that can be used for all four types of authorizations discussed earlier and is compliant with the PCI requirements. Your customers can either select the credit card authorization or the bank account details section based on their preference. They can then specify whether it is a one-time or recurring payment.
This template is available in multiple formats, like DOCX, DOTX, Google Docs, and ODT formats. This editable template contains all relevant information fields and can be easily edited if needed.
How to Use the Credit Card Authorization Form Template
We will review here how to use this template by going over the contents of each section of this form.
In this section of the template, the customer will write the Cardholder’s Name as it appears on their card and check the relevant box for Card Type. Write the Credit Card Number and Expiration Date next.
If the customer wants to initiate a direct debit transaction from their bank, then use this section. Select the appropriate account type. Then write the customer’s Bank Name, Account Number, Account Name, and Routing no.
In this section, the customer will provide their Billing Information. They can write the Address, City, State, and Zip Code. Moreover, they have to provide their Phone Number and Email Address as well.
At the end of this section, the Authorization Statement is present. The customer can fill out the name of your business and the amount, which you can deduct from their credit card.
If you are using this form for payments for subscriptions like fitness club memberships, etc., guide your customers to select the Recurring Charge checkbox in this section of the template. The customer can write the date when their card would be charged for the subscription each month. Underneath the date, the customer can also specify the exact name of the subscription.
If you are charging the card for a one-time payment, then guide your customer to select the One (1) Time Charge checkbox in the form. The customer can then write the date when the payment can be taken from their card and also specify the purpose of the payment in the space provided in the form.
At the end of the form are various clauses related to the customer authorization agreement. The cardholder must check all the boxes to indicate that they have read and understood the agreement. The first clause indicates and acknowledges the validity of the authorization. The customer can write the date in the space provided. Furthermore, the customer also indicates the number of days required to cancel the authorization before the next billing date.
The next clause concerns payments involving ACH transactions. The cardholder authorizes you to retry collecting the payment if there are no sufficient funds in their account on the billing date. They also agree to pay an additional fee for each returned payment, which can be indicated in the space provided in the template. Banks handling the transaction normally charge between $15 and $35.
Lastly, the customer should also confirm that the credit card being used is issued to them and that the bank details are correct. They also acknowledge that they will not dispute the charges if they are according to the purposes mentioned in the form.
To complete the form, the credit card holder should sign it and write their Name and the Date when the form was signed.
Why Credit Card is Favored Over Debit for Car Rentals
A credit card acts as a safety net for your car rental business as it allows you to block a certain amount of funds on your customer’s card as insurance. If something goes wrong during the rental period, you can easily deduct that amount to cover the damages. Funds cannot be blocked with a debit card. Therefore, you cannot pull money directly from your customer’s accounts if they do not have sufficient funds available in their bank account. Accepting a debit card as a security deposit thus puts you at financial risk.
PCI Compliance and Credit Card Data
It is critical that you understand the risks of handling sensitive financial information as a merchant when using your customers’ credit card information. Compliance with the Payment Card Industry Data Security Standard (PCI-DSS) is necessary to avoid penalties and to ensure the secure handling of financial information for both you and your customers. Conduct regular safety audits to make sure that your practices are up-to-date.
