Final answer:
Authorization and capture are two important processes in payment transactions, involving the approval of a payment method and the transfer of funds from the customer's account to the merchant's account.
Step-by-step explanation:
Authorization and capture are two important processes in payment transactions. Authorization refers to the approval of a payment method, ensuring that the customer has sufficient funds or credit to complete the purchase. It confirms that the payment instrument is valid, but does not actually transfer the funds. Capture, on the other hand, is the process of collecting the funds from the customer's account after the transaction has been authorized. It involves the actual transfer of the funds from the customer's account to the merchant's account.
Authorization typically takes place at the moment of the transaction, where the customer's payment method is verified and approved. Once the authorization has been obtained, the merchant can proceed with the capture process, which may occur immediately or later, depending on the business's policies. For example, in e-commerce, the capture usually happens when the order is ready for shipment.