The term “authorization” refers to the process of verifying with a prepaid card issuer that an account has sufficient funds available and is in good standing. When a prepaid debit card transaction is “authorized”, the available balance of the account is reduced by the authorized amount.

In some types of prepaid debit card transactions (such as “pay at the pump” gasoline purchases, hotel room transactions, or car rental transactions), an authorization hold may be placed on the account which is larger than the actual transaction amount.