Verify Credit Card Without Charging It

Verify Credit Card Data on Credit Card

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Can you Verify a Credit card Without Charging it?

Yes! Sometimes…….
It depends on the type of card you are trying to verify. Visa allows you to do this, but Mastercard, Discover, and American Express do not. However, there is work around.

Why, Verify Card Data?

As a business owner there are some situations that require you to verify that a customer’s credit or debit card information is valid and that sales can be processed with that cardholder data. There is nothing worse than attempting to bill a customer with information that is inaccurate and scrambling to receive payment for your goods or services after the fact.
There are quite a few scenarios in which you would want to do this. The most common reasons you would want to verify cardholder data are:
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If you own a business that gives free trials to your customers that automatically start billing after a certain amount of time, you are going to want to make sure that the card information that the customer has left on file is accurate. Common for memberships and software as a service (SAAS) businesses.
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You want to verify that cardholder data is accurate before pre-ordering materials, or providing services that are billed upon completion. Common for rental companies and hotels.
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You want to store your customer’s card information for recurring billing purposes on a virtual terminal for later use. The process of storing encrypted credit card data is called “Tokenization” and usually requires verification.
Green Number 1
If you own a business that gives free trials to your customers that automatically start billing after a certain amount of time, you are going to want to make sure that the card information that the customer has left on file is accurate. Common for memberships and software as a service (SAAS) businesses.
Blue Number 2
You want to verify that cardholder data is accurate before pre-ordering materials, or providing services that are billed upon completion. Common for rental companies and hotels.
Green Number 3
You want to store your customer’s card information for recurring billing purposes on a virtual terminal for later use. The process of storing encrypted credit card data is called “Tokenization” and usually requires verification.
Whatever the reason, the most ideal scenario is being able to verify a credit card without actually charging it. There are a few ways you can do this, depending on the card type.
Verification of Credit Card Data Online

Visa’s Account Number Verification (AVN) Service-

Visa has a verification service called the Account Number Verification (AVN) service which is commonly referred to as the “Zero Dollar Verification Service.” This service verifies the credit or debit card number, the cardholder address using the Address Verification Service (AVS), and Cardholder Verification Value (CVV) code. However, it will not be able to determine if future sales will be approved. That depends on the funds available in the customer’s account.

 

To use this service, you run a sale for $0.00 on your physical credit card terminal or online gateway via the virtual terminal. An approval response indicates that the information has been verified. On virtual terminal accounts, CVV and AVS responses will let you know if the Address and the 3-4 Digit security code (CVV) match.

 

It is important to note that the cardholder will see a transaction on their account for $0.00 which will usually disappear in the following 24-48 hours. It will usually be labeled as “Visa Provisioning Service $0 Charge”.

Visa charges an assessment for using this service on a per transaction basis.
Zero Dollar Verification Fee Credit $0.035
Zero Dollar Verification Fee Debit $0.030
Zero Dollar Verification Fee International $0.070

Mastercard, Discover, and American Express-

Unfortunately, at this time the other card brands do not support Zero Dollar Verification. However, you can still verify card information with a very small charge, even as low as a single penny $0.01.

 

Once you run that charge, you can immediately void it and although it will show as a pending sale on your customers bank or credit card account, the hold will expire after 24-48 hours.

The Bottom Line

A customer’s main concerns with charging their card is two-fold.

– They don’t recognize the charge.

Even with Visa’s service, there is a high likelihood that your customer will see a charge on their account for $0.00 and not recognize it. While a payment is pending, the description does not usually identify your business name and the customer will not know where the charge came from. In the case of Visa, the descriptor will say “Visa Provisioning Service $0 Charge” or something similar.
The good news is that the customer is unable to initiate a dispute on an authorized charge, and would need to wait for the charge to become settled. Since you are not settling the transaction, the risks of chargebacks are minimal.

– They customer does not want their funds to be on hold.

When you process a sale on a credit or debit card, two things happen. An Authorization to put the funds on hold, and a settlement that captures the funds at the end of the business day.
When an Authorization happens, even if you void the sale the customers funds will still be put on hold by their bank. The bank that issues the credit or debit card decides how long to hold funds pending an authorization’s settlement. Typically, these authorizations expire after 24-48 hours and the funds are made available to the customer but some banks may issue authorizations for a week or more.
A customer that wants to have access to the funds in their account will likely be more upset when authorizations are larger. It is best to keep authorizations as small as possible when verifying cards to avoid potentially unhappy customers.

Best Practices

Generally speaking, its best to alert your customer of the potential that a small charge will appear on their account and will expire in a day or so. Even verifying a credit card without charging it will show up on a customers account so to avoid giving a customer a potentially negative experience, information up front is the best policy.

 

Do you need to be able to verify credit cards for your business? If so, reach out to us today and we can set you up with some of the “Best pricing in the industry”.

James Ritter Author Image

James

In 2009, James entered the electronic payments industry, discovering a landscape marred by unscrupulous sales reps exploiting small businesses. Committed to change, he educates and guides small business owners on navigating payment processing intricacies for the best rates.

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