What Is a Misuse Fee for Visa Authorizations?

Visa will impose a "misuse" fee for authorizations that are not settled or reversed within a given amount of time. In other words, if a card is processed for $1.00 as an "Authorization" (aka Hold), and the transaction is not settled within the determined time period (described below), then a misuse " fee will be imposed. There may be a situation where a transaction is processed, but the funds for the transaction will be on "Hold" until the order is shipped. If the "Hold" remains unsettled for too long, then Visa will impose a "misuse" fee for this transaction. In contrast, if a merchant submits a transaction (i.e. $1.00, in order to verify the CVV and address for the card) the merchant can immediately "Void" the transaction and the transaction will settle on the same day. In this case, a misuse" fee will not be charged. The following processing guidelines are in place in order to avoid the misuse" fee:

  1. Card-present transactions: Transactions that have been submitted in error or cardholder-canceled transactions must be reversed within 24 hours.  
  2. Card-not-present transactions: Full- or partial-Visa authorization reversals must be processed within 72 hours.  
  3. All merchants: Settlement must occur within 10 days of authorization.
  4. Travel and entertainment merchants: Must settle within 20 days of authorization regardless of transaction date.

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