# How Online Card Payments Work — Stripe Payments

Source: https://www.skillbyai.com/en/stripe-payments/f-flow

> Authorisation, capture and settlement.

## The parties and the three stages

Five parties take part in an online card payment: the **customer** (cardholder), the **merchant** (you), the **payment processor** (Stripe, which also acts as the acquirer relationship for you), the **card network** (Visa, Mastercard and others) and the **issuer** (the customer's bank). **Authorisation** asks the issuer whether the payment is allowed; if approved, the funds are reserved on the card. **Capture** tells the issuer to actually take the authorised amount; Stripe captures automatically by default, but you can authorise now and capture later. **Settlement** is the movement of funds from the issuer through the network to Stripe, which adds them to your Stripe balance and later **pays out** to your bank account, minus fees.

## From tap to bank account

A card payment passes from the customer through the merchant and Stripe to the card network and the issuing bank, and money later settles back.

![Three ideas: how a card payment flows, how a Stripe account and its keys work, and the core objects of the API.](assets/figures/stripe-payments/section-1-map.svg) — Figure 1.1 — Customer, merchant, Stripe, card network and issuer.

## Authorise now, capture later

Separate authorisation and capture with the Node.js library (a sketch).

```javascript
import Stripe from 'stripe';
const stripe = new Stripe(process.env.STRIPE_SECRET_KEY); // sk_test_...

// 1. Authorise only: funds are held on the card, not yet taken
const intent = await stripe.paymentIntents.create({
  amount: 5000,            // 50.00 in the smallest currency unit
  currency: 'usd',
  capture_method: 'manual',
  automatic_payment_methods: { enabled: true },
});
// ...the customer confirms the payment on the client...
// the PaymentIntent then waits in status 'requires_capture'

// 2. Later, when the goods ship: capture all or part of the amount
await stripe.paymentIntents.capture(intent.id, { amount_to_capture: 4500 });

```

## A restaurant bill and a tip

Authorisation is like the waiter checking your card can cover the meal; capture is the final charge once the bill is settled; settlement is the restaurant's bank receiving the money a few days later.

**Quiz:** Which stage reserves funds on the card without taking them yet?

- [ ] Payout
- [ ] Settlement
- [x] Authorisation
- [ ] Reconciliation

*Answer:* Authorisation. The issuer approves and holds the amount; capture actually takes it. Uncaptured card authorisations expire after a limited window, so check the docs for the exact limits.