While payment processing suggests running a credit card's specs to get an authentication, fraud processing entails running the specs to get a numeric grade for legitimacy versus shadiness. In an online process a web presence may fraud process a card and then decide whether or not to go forward with an authentication or may alternatively authenticate a card and then decide whether or not to go through with a settlement based upon a fraud processing following the payment processing. Authentications do not necessarily have to be settled. When I give my credit card specifications and they are successfully authenticated for $17.32 for iced tea and lasagna at WINFLO I am giving the restaurant permission to take money from me, but they have not taken money from me at that point. They may later settle and at this point they may take money from me and not necessarily the amount of the authentication. If I authenticate at $17.32 and then write a five dollar tip on the receipt I will end up seeing a settlement for $22.32 at my bank records. Alternatively one may authenticate for getting $5,000 dollars of product from a distributor and when the distributor turns out to only have $3,000 in stock a circumstance could occur wherein $3,000 is settled for and a separate authentication and a separate settlement for another $2,000 is just going to have to happen later. A reason to not settle at all for what appears to be legitimate credit card specs that authenticated just fine is a suspicion of the order be challenged after it arrives by an unscrupulous party, I suppose. Here comes in the fraud processing. CyberSource and ReD (Retail Decisions) are examples of providers for this sort of grading service.
Addendum 3/30/2015: This copy has a big mistake in it. You are doing an authorization and not an authentication when you do an "auth" on a credit card. See: this
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