Code 10 Authorization

In the payments industry, a Code 10 Authorization refers to a specific type of authorization request made by a merchant to the card issuer when there is suspicion of fraud or potential security risks associated with a transaction. The purpose of a Code 10 Authorization is to discreetly alert the card issuer to the suspicious circumstances without alarming the customer or the potential fraudster.

Here’s how it typically works:

  1. Merchant suspicion: When a merchant identifies a transaction that raises concerns, such as a suspicious customer behavior, a potentially stolen card, or any other red flags, they may decide to initiate a Code 10 Authorization.
  2. Code 10 call: The merchant initiates a phone call to the card issuer’s authorization center. They indicate that they would like to perform a Code 10 Authorization and provide the necessary details about the transaction.
  3. Verification process: The authorization center agent will follow specific protocols and ask a series of “yes” or “no” questions to gather additional information and assess the situation. The agent will try to verify the merchant’s suspicions discreetly.
  4. Merchant guidance: The agent may provide instructions to the merchant, such as asking them to retain the card, requesting additional identification, or advising the merchant to complete the transaction normally.
  5. Decision and response: Based on the information gathered during the call, the card issuer’s authorization center makes a determination. They might approve the transaction, decline it if fraudulent, or recommend further action.

It’s important to note that the specifics of Code 10 Authorization can vary between payment networks and card issuers. The process aims to strike a balance between fraud prevention and ensuring a smooth customer experience, without directly confronting the potential fraudster during the transaction.

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