Authorization Reversal
Definition
Cancels an authorization hold before capture, releasing the held funds — distinct from a refund (which returns captured funds) and overlapping with a void.
An authorization reversal cancels an authorization hold before funds are captured, releasing the earmarked amount on the cardholder's account. It is sent by the merchant or acquirer when an order is cancelled, the authorization is no longer needed, or only part of an authorized amount will be captured. A reversal is distinct from a refund, which returns funds already captured and settled, and it overlaps in intent with a void — both release an uncaptured hold before settlement. Support and exact behavior vary by scheme, card type, acquirer, and PSP.
An authorization reversal is how a merchant tells the issuer to drop a hold it no longer needs. When you run an authorization, the issuer earmarks funds on the cardholder’s account; if the order is cancelled before you capture, or you will only capture part of the authorized amount, a reversal releases the earmark so the cardholder’s available balance is restored. Sending one promptly is the difference between a clean cancellation and a customer staring at a phantom hold for days.
Reversal vs void vs refund
The three operations sit at different points in the lifecycle. A reversal and a void both release an uncaptured hold — no money has moved, so nothing is returned, the earmark is simply dropped. The terms overlap heavily; many PSPs use one word for the same pre-settlement intent. A refund is different: it returns funds that were already captured and settled, which is a new money movement rather than the cancellation of a hold.
Support and exact behavior vary by scheme, card type, acquirer, and PSP, so confirm the specific operation and window with your provider rather than assuming a universal rule. For the full mechanics of how authorization, capture, and settlement fit together, see the payment lifecycle guide.
Related terms
Authorization
Authorization is the real-time process by which a card payment is approved or de...
Capture
Capture is the instruction sent by a merchant or PSP to collect funds from a pre...
Partial Authorization
A partial authorization occurs when a card issuer approves a transaction for les...
Pre-Authorization
A pre-authorization (pre-auth) is a temporary hold placed on a cardholder's fund...
Void
A void is the cancellation of an authorized card transaction before it is captur...