What occurs during the authorization process in card payments?

During the authorization process in card payments, the acquirer plays a crucial role by verifying the validity of the card being used and reserving the necessary credit amount for the transaction. This step is essential to ensure that the cardholder has sufficient funds or credit available to complete the purchase. When the merchant submits a transaction for authorization, the acquirer connects with the card network (such as Visa or Mastercard) and then communicates with the card issuer (the bank that provided the card to the cardholder) to confirm that the card is active, has not expired, and has enough credit to cover the transaction amount. If everything checks out, the transaction is authorized, allowing the merchant to proceed with the sale. This process is vital for reducing fraud risk and ensuring both parties are protected during the transaction.

The other options do not pertain to the authorization process: processing a refund is a different transaction, providing a discount is usually related to promotional activities rather than authorization, and issuing a new card is a service provided by the card issuer and not part of the authorization process.