A small per-transaction fee charged each time a transaction is submitted for authorization — whether the authorization is approved or declined. Authorization fees are separate from the percentage transaction rate and can add meaningful cost for merchants with high transaction counts but low average ticket sizes. Ask your processor whether authorization fees apply to declined transactions as well as approved ones.
See common payment processing fees that appear on merchant statements
The authorization fee applies at the moment a transaction is submitted for approval — before the outcome is known. This means a declined transaction can generate the same authorization fee as an approved one, depending on the processor. For businesses with many small-ticket transactions, high-volume recurring billing, or environments where declined re-attempts occur regularly, authorization fees accumulate independently of the percentage transaction rate. Because this charge is separate from the rate, it may not be obvious how much it contributes to your effective rate without reviewing the per-event line items on your statement.
It depends on the processor. Some charge authorization fees on every submission — approved or declined. Others only charge them on approved authorizations. This is worth confirming before signing, particularly for merchants with recurring billing programs where card declines and re-attempts are common.
They may appear as a separate line item per transaction, or they may be bundled into a combined per-item or transaction fee. Ask your processor for a description of each per-event charge and whether declined transactions are billed separately. Reviewing the transaction detail section of your statement is the most reliable way to identify this fee.
The impact depends on your transaction count and average ticket size. Merchants with many small transactions generate more authorization events per dollar of revenue than those with fewer, larger sales. To see the full picture, calculate your effective rate using your complete statement — not just the percentage rate — so all per-event fees are reflected.
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